Bloomin’ Brands, Inc. shares are trading lower on Friday.

The company reported third-quarter adjusted earnings per share of 21 cents, beating the street view of 20 cents. Quarterly revenues of $1.038 billion (down 3.8%) missed the analyst consensus of $1.042 billion.

The decrease in total revenues was primarily due to lower comparable restaurant sales, the impact of foreign currency translation of the Brazilian Real relative to the U.S. dollar, and the net effect of restaurant closures and openings.

The adjusted restaurant-level operating margin decreased to 12.5% from 14% due to lower restaurant sales and higher labor, operating, and commodity costs, primarily due to inflation.

Adjusted operating income margin in the quarter under review decreased to 3% from 5.3% in the year-ago period due to closure costs in from the closure of nine restaurants in Hong Kong.

The company exited the quarter with cash and equivalents worth $83.632 million.

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“As I continue listening and learning during this evaluative period, it is clear to me that our path to sustainable sales and profit growth will be enabled by our team members executing a consistent and elevated guest experience, focusing first on Outback Steakhouse,” said Mike Spanos, CEO.

Strategic Sale Of 67% of Brazil Operations: On November 6, the company entered into a purchase agreement with Vinci Partners to divest 67% of its Brazil operations for R$1.4 billion (approximately $243 million).

This transaction values the business at R$2.06 billion, reflecting a multiple of 6.5x trailing twelve months EBITDA, net of royalties.

As part of this strategic re-franchising, the firm will continue to receive an ongoing royalty stream. The purchase price will be paid in two installments: 52% upon closing and the remaining 48% one year later.

Additionally, Bloomin’ Brands retained the option to sell the remaining stake in 2028.

Outlook: Bloomin’ Brands has lowered its FY24 outlook, now expecting adjusted EPS to be between $1.72 and $1.82, compared to the previous estimate of $2.10 to $2.30. The street view pegs at $2.08.

Bloomin’ Brands expects fourth-quarter adjusted EPS to range from $0.32 to $0.42, below the $0.67 analyst consensus, and projects U.S. comparable restaurant sales to decline by 2% to 1%.

Price Action: BLMN shares are trading lower by 10.6% to $15.00 premarket at last check Friday.

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