NEW YORK (TheStreet) -- Bloomin' Brands (BLMN - Get Report) was rising 12.59% to $25.85 on Tuesday after the company, which owns the Outback Steakhouse and Bonefish Grill restaurant chains, reported fourth-quarter net income that more than tripled thanks to a gain from the acquisition of a controlling stake in its Brazilian operation.
Bloomin' Brands earned $59 million, or 46 cents a share, in the fourth quarter, up from $18.4 million, or 15 cents a share, in the same period a year earlier. The latest period included a $36.6 million gain from the Brazilian acquisition. Without this gain and other items, earnings per share were 27 cents. Analysts polled by FactSet expected EPS of 26 cents. Revenue increased year over year to $1.05 billion from $998.4 million, which was in line with analysts' expectations.
Domestic same-store sales in restaurants opened 18 months or more rose 1.4%, as traffic ticked up 0.3% and menu prices increased.
TheStreet Ratings team rates BLOOMIN' BRANDS INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about its recommendation:
"We rate BLOOMIN' BRANDS INC (BLMN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, BLOOMIN' BRANDS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- BLMN's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 1.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The gross profit margin for BLOOMIN' BRANDS INC is currently extremely low, coming in at 13.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.16% significantly trails the industry average.
- The debt-to-equity ratio is very high at 3.49 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- You can view the full analysis from the report here: BLMN Ratings Report