Activist investor Starboard Value has taken a more than 5% stake in Bloomin’ Brands, according to a report published Thursday in the Wall Street Journal. The stake makes Starboard one of the casual dining company’s top five shareholders.
It’s not initially clear what changes Starboard may be seeking. Wall Street responded favorably to the news Friday morning, with pre-market shares at Bloomin’ up 8%.
Starboard is no stranger to the restaurant industry. Its shareholder coup in 2014 led to its control of Darden Restaurants’ board and facilitated changes such as streamlined kitchen operations and a sharpened focus on alcohol sales and improved breadsticks. At the time, it was the largest activist takeover and is largely credited for igniting a turnaround at the company.
In 2019, Starboard invested $200 million in Papa John’s and placed its executives on the board amid the pizza chain’s tumult with founder John Schnatter. Shortly thereafter, Schnatter agreed to step down from his role on the board. Earlier this year, Starboard CEO Jefferey Smith resigned from Papa Johns’ board, noting that he was “extremely proud of the significant progress Papa Johns has made …” since his company’s investment.
“Given the strength of the team, board and overall health of Papa Johns, I feel like now was the right time for me to step down and transition board leadership," he said in a statement.
The Tampa, Fla.-based Bloomin’ Brands is the parent company of Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, and Flemings’s Prime Steakhouse & Wine Bar. Its most recent earnings report earlier this month included a net income of $68.3 million, or 70 cents a share, from a loss of $63.6 million, or 72 cents a share, in the same period last year. Revenues increased to $1.153 billion from $1.125 billion in the same quarter last year. Combined U.S. company-owned same-store sales were up 0.8% in the quarter. By brand: Outback Steakhouse, up 0.6%; Carrabba’s Italian Grill, up 3.5%; Bonefish Grill, up 0.5%; and Fleming’s Prime Steakhouse & Wine Bar, down 2.5%.
Bloomin’ Brands Inc. operates more than 1,450 restaurants in 47 states, Guam and 13 countries, some of which are franchised locations.
Contact Alicia Kelso at [email protected]