Shares of Bloomin' Brands (NASDAQ: BLMN) were tumbling 10% lower in midday trading Friday, after the company reported fiscal third-quarter earnings that beat Wall Street estimates on the top and bottom line.
This seems to be a case of buy the rumor and sell the news for the owner of the Outback Steakhouse chain, because the restaurant operator said sales were doing better and its quarterly loss was narrower than expected.
Bloomin' Brands reported revenue of $771 million compared with forecasts of just $752 million, saying it experienced consistent weekly sales momentum throughout the period. Consumers chose to dine in more often even as it retained 50% of the off-premise incremental volume it achieved when all of its dining rooms were closed.
That led it to notch a net loss of $17.6 million, which is $0.20 per share, or $0.12 per share on an adjusted basis -- far better than the $0.32 per-share loss analysts thought it would post.
The stock has more than tripled off the lows it hit back in March, so having come so far so fast, even with a better-than-expected earnings report, may have investors taking profits.
Restaurants generally benefited from the warm summer and autumn weather, and now that we're heading into the winter months with indoor seating capacities limited and states mulling new shutdowns, the market may think this is as good as it gets.
10 stocks we like better than Bloomin' Brands
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Bloomin' Brands wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of October 20, 2020
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.