Bloomin’ Horrible: QAV America #75

QAV AMERICA 75

[00:00:00]

Cameron: That’s a great movie, by the way. You seen The Lego Movie? Ah, it’s so great.

Tony Kynaston: from. Everything is awesome

Cameron: Welcome to QAV America, Tony, 7- episode 75. It’s the 20th of October, 2026. Uh, nothing, nothing new in the state of the f- the world

Tony Kynaston: Oh, come on. Elon’s got Chitty Chitty Bang Bang working for him in

Cameron: E-

Tony Kynaston: now

Cameron: Elon’s got a car that can fly for two seconds. Um, can flip. Pretty cool. Not much point to it

Tony Kynaston: driven by compressed gas. Did you have one of those cars where you put a SodaStream cylinder in it and then

Cameron: God, yeah. I’d forgotten about that.

Tony Kynaston: Same principle.

Cameron: Yeah

Tony Kynaston: SodaStream lasts about the same as the compressed gas

Cameron: Yeah. Yeah.

Tony Kynaston: too

Cameron: Um, we’ve, uh. Well, France is on fire, bonds are up, uh, oil’s up, uh, mostly, um, depending on the [00:01:00] contract

Tony Kynaston: $109 I

Cameron: for Brent.

Tony Kynaston: Yeah. S- yeah, okay

Cameron: WTI is a little bit lower than that, but not by much. Uh, um, diesel, Ukraine’s bombing the hell out of Russia’s refineries. Uh, Trump’s trying to b- buy Russia’s diesel and, uh, trying to get rid of Zelenskyy.

That’s all going well. Everything’s going well. Everything’s going to plan. Uh, smooth sailing

Tony Kynaston: Oh, well, anyway, thanks for that, Cam. I’ll talk to you next

Cameron: yeah.

Tony Kynaston: been a quiet week.

Cameron: Yeah. Nothing happening.

Tony Kynaston: Yeah.

Cameron: Nothing new, just chaos everywhere. Um, let me talk about the portfolios before I get into my pulled pork, Tony. The model, US model portfolio is up 74.1% versus the benchmark, the S&P 500 up 73.1%.

Tony Kynaston: Winner. Winner, winner. Winner, winner, chicken dinner.

Cameron: Yeah. [00:02:00] Uh, the, well, don’t get me started on chicken dinners, ’cause you know I’m, who I’m talking about this week for my pulled pork. It’s gonna be a lot of chicken dinners.

Tony Kynaston: Oh, I’m, I’m, I’m getting angrier already of

Cameron: Yeah, me too. I mean, I was fascinated to do it because I’ve always wondered about this company, but it was like, yeah, crazy. QAV America Light Portfolio is up 7.7% versus the S&P 500 up 11.8, so still not going well.

And we had a couple of stocks go really backwards again this week in the Light Portfolio. Danaos, the Greek shipping company, down 6.5%. Global Ship Lease, GSL, down 7.3%. Shinhan Financial, SHG, down 6.9%. And Kohl’s, KSS, was up 6.1%. Um, I did have sort of explanations for all of those, but, uh, my notes got deleted, so I won’t talk about them.

But nothing [00:03:00] interesting, just stuff going on.

Tony Kynaston: Oh

Cameron: Hmm

Tony Kynaston: it’s surprising the shipping companies are going down though cause I would’ve thought um you know you the paper all the time about at least oil carrying ships are going up dramatically and the rates they’re charging

Cameron: Yeah. There was a good excuse for that, but, um, something to do with something they’d announced, but I can’t remember what it was. Bottom line is the portfolio is. Both of the portfolios are not doing well under the current environment. They’ve both retreated quite a lot. Um, as I’ve always say, the model portfolio is up 129% as of July.

Now it’s down to 74. So it’s dropped quite a lot. But, uh, anyway, that’s kind of business as usual. I have had to do some trading recently in the live portfolio. Um, oh, really? I have to log into the QAV website in order to see the portfolio detail? That’s not fair

Tony Kynaston: Well it’s There is a bug in the QAV website Cam I’m not gonna [00:04:00]

Cameron: Mm-hmm. No, it’s not. It’s

Tony Kynaston: labor the point

Cameron: the li-

Tony Kynaston: log in every week as well

Cameron: well, the, the li- the portfolios are there for,

Tony Kynaston: calculation

Cameron: they’re there for members, you know? So, you know, I’m not giving it away, Tony. Um, in the light portfolio, the American light portfolio, I had to sell commercial vehicle CVGI last week and, uh, replaced it with Atlanticus Holdings that we talked about on the show.

That’s the only trade really I’ve had to do. So my pulled pork this week, uh, cutting straight to it, Bloomin’ Brands, BLMN on the Nasdaq is the ticker. Oh, boy. Wow. Um, so for people who don’t know who Bloomin’ Brands is,

Tony Kynaston: They’re blooming awful

Cameron: hey, don’t steal my notes. That’s in my notes. Bloomin’ [00:05:00] horrible I’ve got. They own a number of chain restaurants in the United States. Most famously, the largest of those is the Outback Steakhouse. Have you ever been to an Outback Steakhouse, Tony?

Tony Kynaston: yes I have

Cameron: My,

Tony Kynaston: Georgia

Cameron: my v-

Tony Kynaston: Red Lobster and

Cameron: Yeah.

Tony Kynaston: ones

Cameron: Yeah. Chili’s, uh, Olive Garden

Tony Kynaston: Olive Garden was there yeah

Cameron: My very first trip to the United States ever was in 1998. Uh, I was working for Microsoft, flew there. Um, the, my, one of my main contacts at Microsoft, who was like our senior engineer guy, picked me up in his, uh, uh, Dodge Charger or his, uh, something. Said, “I’m gonna take you out to lunch.”

I said, “Oh, that’s great.” “Gonna go to my favorite place.” “Oh, that’s great. What is it?” “The Outback Steakhouse.” Now, first of all

Tony Kynaston: He probably thought he was doing you a favor

Cameron: Who picks up [00:06:00] an Australian and takes them to an Australian-themed restaurant?

Tony Kynaston: he

Cameron: Why,

Tony Kynaston: a favor

Cameron: why, why would you do that? Ease you in. But as you and every Australian who’s been to an Outback Steakhouse already knows, has nothing to do with Australia except for the naming.

It’s a marketing exercise. And the first thing that he gets is the Bloomin’ Onion. He goes, “Oh, you must love this back in Australia.”

Tony Kynaston: That was that was the first thing thrust in front of my

Cameron: I was like, “What the frog is this?” And he goes,

Tony Kynaston: is this

Cameron: blooming onion.” So for Americans listening to this, uh, I’ve only ever seen a blooming onion, had one twice. Both times were in Seattle.

Uh, the second time was with Chrissy at some other place. It wasn’t at Outback Steakhouse. Um, it’s not a thing in Australia. It’s never been a thing in Australia. Um, you’d probably get shot in Australia if you tried to serve that to someone. Um, absolutely horrible. And I [00:07:00] looked them up. For people who have never seen a blooming onion, for Australians or Americans, it’s a large onion cut to resemble a flower.

It sort of expands. They soak it in ice water and expands, and then they batter it and deep-fry it and serve it with a dipping sauce. I’m not gonna lie, like it’s e- it’s like eating onion rings in a way. Like, it’s, it’s greasy and disgusting, but at some level I guess it kind of works for something disgusting.

But, um,

Tony Kynaston: No

Cameron: I did look it up. A single blooming onion contains approximately 1,660 calories and 87 grams of fat. So that’s 75% of my daily calories right there in an onion.

Tony Kynaston: As an appetizer

Cameron: And an onion, by the way, I eat onions all the time. I fry up onions all the time and eat them just for, you know, to eat because they have pretty much zero calories in onion.

They’re very filling, a lot of [00:08:00] water obviously in them. You can fry up a couple of onions and eat them and they’re filling and they’re delicious. Um, but yeah, this is one onion, two-thirds of my daily calorie intake. Um,

Tony Kynaston: Yep And it’s like if Yeah again if people haven’t seen it it’s like you get a bowl of chips and you put them all end on end into a pin cushion

Cameron: Yeah. Yeah, so they’re standing up. Yeah

Tony Kynaston: It’s and it’s just as calorific

Cameron: Uh, Wikipedia says it was probably invented by a guy called Jeff Glowski, uh, in 1985 at a New Orleans restaurant called Russell’s Marina Grill, where future Outback Steakhouse co-founder Tim Gannon worked at the time.

Tony Kynaston: Mm-hmm

Cameron: just stole the idea probably. So, mm,

Tony Kynaston: there’s more to that though

Cameron: oh, yeah

Tony Kynaston: Yeah cause Tim Gannon uh p-p-p-p I think it was Tim Gannon I’m just looking it up Anyway the So you write about Klowsky and Tim Gannon and then before the dish ever went to America though [00:09:00] uh or at least the American corporate menu the Yeah it was Klowsky Klowsky took a cooking job at a restaurant called JoJo Ivory’s New Orleans Restaurant in Potts Point in Sydney

Cameron: No

Tony Kynaston: where he had something called the onion mum on the menu which was a crisp fried onion sculptured like a chrysanthemum

Cameron: No way. I’m not believing that at all

Tony Kynaston: then blame AI That’s what I got

Cameron: Well, which, uh, sort of ruins the next part of my story, but which of the. There were four co-founders of the Outback restaurant. Which of them was the Australian?

Tony Kynaston: None

Cameron: Which of them had,

Tony Kynaston: Yeah go on

Cameron: which of them had been to Australia?

Tony Kynaston: None

Cameron: Which of them had ever talked to an Australian?

Tony Kynaston: Well they’d seen Crocodile Dundee

Cameron: They had seen Crocodile Dundee. It was Australia’s bicentenary, which was getting some attention, and the America’s Cup had just been held here.

Uh, [00:10:00] But they didn’t even. The thing again, they didn’t reach out to Paul Hogan, as far as I know, or Olivia Newton-John, or, I don’t know, Dame Edna Everage. I mean, none of, they, they should’ve got an Aussie to come on as a consultant. Probably could’ve paid them a fortune. Anyway, none of that happened. Um, Chris Sullivan, one of the co-founders, talked about it in 2001.

He said they were just trying to think of, uh, an, uh, some sort of an Australian-themed restaurant they can sell to Americans. There was a, they were at a jazz club. Apparently, one of the co-founders, Bob Basham’s wife, wrote Outback on a mirror in lipstick

Tony Kynaston: Why would she do that

Cameron: ‘Cause she was dramatic? I don’t know.

Tony Kynaston: she was out the

Cameron: Yeah.

Tony Kynaston: There there was a mirror in the restaurant they

Cameron: Yeah.

Tony Kynaston: Okay

Cameron: And my favorite detail is according to Chris Sullivan’s account, they deliberately decided not to visit Australia

Tony Kynaston: Yes

Cameron: didn’t want the [00:11:00] reality to get in the way of a good story, so

Tony Kynaston: Look I total props to them for doing it for coming up with an idea and then you know global rollout for it But uh you kinda feel like a you know a Indian going to a Redskins game don’t you It’s it’s you know

Cameron: yeah

Tony Kynaston: it’s just very very tone deaf

Cameron: Or I imagine a, a Chinese person going to a Chinese restaurant in Bundaberg in the 1970s

Tony Kynaston: Can s yep exactly You know that there are I think it’s six Outback restaurants in Australia

Cameron: And you’ve also just stopped s- stealing my notes. I was shocked, shocked to discover that, Tony.

Tony Kynaston: So was I

Cameron: Not shocked when I looked at the cust- the customer reviews. Oh, is it really?

Tony Kynaston: Yeah

Cameron: Okay

Tony Kynaston: They tried to tone it down

Cameron: Right. Uh, that, that explains that. There’s one in Aspley, just a couple of suburbs away from me, I saw

Tony Kynaston: I saw that and I thought That’s perfect for Aspley They’d love [00:12:00] it So I tell you about the time I I went went back from Melbourne to Brisbane to visit my parents who lived in Holland Park and we went to They said We gotta take you to this great restaurant we’re going to all the time okay All right So we go there Uh we’re in the car park and we’re lined up to get in Sizzlers I’m I’m like I am not lining up to go to this place This

Cameron: Yeah.

Tony Kynaston: I talked them into going somewhere else but you know

Cameron: Yeah. Yeah.

Tony Kynaston: simple steak you

Cameron: Gosh.

Tony Kynaston: and it’s usually better

Cameron: Have you been watching Napoleon Dynamite? ‘Cause that’s the second time you’ve said gosh,

Tony Kynaston: No

Cameron: this afternoon. Gosh, Tina. Eat your dang food, Tina. Yeah, so, um, Outback Steakhouse is exactly what you’d expect an Australian-themed restaurant that came out of Tampa, Florida to look like. Uh, it’s horrible.

So according to the

Tony Kynaston: just If I can just explore that Cam Like when I went to it [00:13:00] and I know you’ve been to it it’s like it’s booths We don’t have booth seating in restaurants in Australia are TVs hanging from the ceiling It’s yeah it’s more like going to a sports bar than it is going to a restaurant for an Australian It’s

Cameron: Yeah.

Tony Kynaston: different décor

Cameron: Yeah.

Tony Kynaston: Yeah

Cameron: I do

Tony Kynaston: I

Cameron: though. Gotta say, I do like the booth.

Tony Kynaston: not saying

Cameron: I love a booth.

Tony Kynaston: not a thing in Australia

Cameron: No, it’s not a thing. No, yeah.

Tony Kynaston: And they And I think they had a controversy for a while They Didn’t they have something called the Aboriginal Onion

Cameron: Oof. Well, that’s almost as offensive as one of the dishes that I’ve coming up in my notes. But before I get to that, according to their website, they conceived an Australian theme with a no rules, just right mindset to create a fun, friendly dining experience that would differentiate themselves from other dining concepts.

In March 1988, they opened the first Outback Steakhouse in Tampa, Florida. Since then, our family of brands has expanded to include Carrabba’s Italian Grill, Bonefish Grill, and [00:14:00] Fleming’s Prime Steakhouse & Wine Bar. Together, these unique founder-inspired restaurants make up Bloomin’ Brands Inc. So, um, the, I, I went and.

By, by the way, did you go to their website?

Tony Kynaston: Uh no

Cameron: I tried to go to their websites, and I got blocked every time saying access denied. I had to turn a VPN on and say that I was in America to be able to access any of their websites for some reason. It’s really weird.

Tony Kynaston: different ones in different countries Cause they operate around the world

Cameron: They do. Well, no, there’s an Australian website. It looks like it was outbackrestaurant.com.au/aspley. I clicked on that and it was not found, so they have some web administration issues. Outback’s menu, according to the website that I finally got to, is all Aussie approved and has such delicacies [00:15:00] as

Tony Kynaston: I never heard of that certification system

Cameron: Yeah, I’ve, I. I used to have this thing that I called Cam approved when I’d go to cafes. I, the boys and I, like 10 years ago, were talking about coming up with a range of stickers that I would put on tables in restaurants or on their windows saying it’s Cam approved. Um, they have Alice Springs chicken, Rockhampton rib eye, fried mozzarella bloomerangs

Tony Kynaston: I don’t don’t know if there are

Cameron: It’s not exactly the kind of place. There may be wild bush chickens.

Tony Kynaston: Yeah

Cameron: fried mozzarella bloomerangs,

Tony Kynaston: Tully cassowary

Cameron: Sydney shrooms, Gold Coast coconut shrimp, all deep-fried and battered by the way, along with their Huli Duli coconut shrimp. Toowoomba salmon

Tony Kynaston: Wollongong’s not even near the

Cameron: No, Toowoomba’s an hour and 20 minutes inland from Brisbane. Uh, I don’t know why you’d [00:16:00] go there for your salmon, yeah.

Tony Kynaston: That’s a long line

Cameron: The Bloomin’ Chicken Sammie. But the most offensive, I didn’t see Aboriginal anything, but the most offensive to me was Kookaburra Wings

Tony Kynaston: Yeah I think that was controversial

Cameron: Uh, and still on the menu, kookaburra wings. Now, the kookaburra, for non-A- for non-Australians, is the most beloved animal in the country. Everyone loves the kookaburra. They’re cute. They laugh all day long.

Tony Kynaston: Yeah

Cameron: just sit there. They’re entertaining, wake you up in the morning with a loud, big laugh. The idea of kooka- having kookaburra wings on the menu got me really cross.

Anyway, um, I went to Trustpilot. So the first question, obviously, is, well, why are these guys on our buy list?

Tony Kynaston: Ага

Cameron: And to make a long story short, ’cause they’re horrible. So I went to, I went to Trustpilot to look up customer [00:17:00] reviews. Outback Restaurants get a two and a f- 2.5 out of five stars. Evaluating 101 reviews, most reviewers were unhappy with their experience overall.

Consumers frequently complained that the main dishes, especially the steaks, were tough, heavily oversalted, poorly prepared, and often arrived completely cold at the table. Many people also noted that the customer service was extremely slow and disorganized, leaving guests waiting for a long time without receiving proper attention or assistance

Tony Kynaston: Yeah that was the funny thing Like when we were in this little town called Aiken Um a few years ago I went to the Masters in

Cameron: I remember

Tony Kynaston: we stayed in Aiken and like there’s four or five of these chain restaurants all together They were packed Like this is a town with maybe a thousand couple of thousand people in it So you know there’s nowhere else to eat They’ve driven the mom and pop restaurants from the market which is

Cameron: Out of business? Yeah

Tony Kynaston: this place is packed and it’s like it’s exactly what those reviews said It was was ordinary Um you know [00:18:00] it was like we we went in Can we get a table Uh uh it’s pretty full Uh wait here You know and and you could see empty tables It was

Cameron: Oh yeah

Tony Kynaston: really bad service Um and then it was like we have the table back We’ve got a you know someone else wants to come in It was just yeah just all geared towards their productivity not our enjoyment

Cameron: Well, to be fair to these guys, when I was looking at Trustpilot, um, their ratings are roughly the same as Taco Bell, Wendy’s, Popeyes Louisiana Kitchen

Tony Kynaston: Yeah but they’re all drive-through restaurants aren’t they Or d you know they

Cameron: Well, yeah, it’s takeaway. I fast food. You can go in and sit, I think. I’ve sat at a Taco Bell

Tony Kynaston: yeah a big difference between Taco Bell and an Outback restaurant though

Cameron: Yeah. Yeah, there is. Carl’s Jr., which is also mostly drive-through, at least whenever I’ve been to it, is rates a bit higher, 3.2 out of 5. But this is relevant because their numbers are down, [00:19:00] and they’re trying to figure out how to get people to come back to Outback. So maybe stop deep-frying everything in batter.

Unless your target market’s Donald Trump, maybe that kinda works. I mean, if it’s just MAGA fat people with red hats that you’re going after, maybe that’s, is your demo. I don’t know. So, uh, they’re huge though. Um, Bloomin’ Brands, according to their website, is one of the world’s largest casual dining companies with approximately 64,000 team members.

They’re not employees, Tony, they’re team members.

Tony Kynaston: Mm-hmm

Cameron: And 1,440 restaurants worldwide

Tony Kynaston: 1,440 Okay

Cameron: Not McDonald’s size, but, it’s apparently it’s casual dining, which is different, I think, to.

Tony Kynaston: No

Cameron: think just right.

Tony Kynaston: Yeah

Cameron: It’s like guy kung fu s- guy ku-

Tony Kynaston: Hey my steak’s cold Mate no rules

Cameron: A guy, a guy at kung fu [00:20:00] was, uh, helping me improve my sidekick the other day and I said, “This just feels so wrong.” He goes, “It feels so wrong because you’re doing it right.”

I said, “Oh, you’ve used that line before, haven’t you? Yeah, that, that slipped off your tongue very, very quickly.” Anyway, uh, Bloomin’ Brands, as I said, bigger than Outback. It’s got all these other things. Now, I, I looked at the, um, other businesses briefly. Carrabba’s Italian Grill offering authentic Italian cuisine passed down from our founder’s family recipes.

Different founders to Outback, by the way.

They

they’ve acquired these other businesses over the years. Um, it gets 3.7 stars on Trustpilot, has 203 locations. Bonefish Grill, market fresh fish from around the world, hand cut in-house every day, 2.4 stars, 150 locations.

Tony Kynaston: in Toowoomba

Cameron: Yeah. Started in 2000, bought out in 2001.

I don’t know [00:21:00] how that happens, but, uh, sounds like there was a something going on. And Fleming’s Prime Steakhouse & Wine Bar, which isn’t on Trustpilot, but has four out of five stars on Yelp, 70 locations throughout 26 states and one in São Paulo, Brazil Uh, so they do have a bunch of international operations, 188 out– They’re mostly Outbacks.

188 in Brazil, 101 in South Korea. These are mostly franchises, and eight in Australia, as you said. They recently sold off 67% of their Brazil operations, but I’ll get to that a little bit more in a second. Outback Steakhouse, though, is, is definitely the major brand. It’s about 57% of the sales in the US and most of the business is running American restaurants itself.

Much, most of the overseas business works differently. Other operators run the brands and pay it fees, [00:22:00] typical franchise model. Um, but, you know, uh, their big problem right now is fixing Outback because it’s suffering, uh, in all manner of ways, which I’ll get into when I get into the numbers. But before I do that, the Brazil, December 2024, they sold 67% of its Brazilian business to a fund managed by an affiliate of Vinci Partners, an investment manager.

They kept 33%, um, and that’s messed with their numbers a little bit, as you can imagine, ’cause they did own them and then they changed the dynamics. But even if you take that out of the numbers for the last couple of years, it’s, it’s by a lot of metrics not doing well, and yet it’s still on our buy lists.

And why? We will get to that. You know, I, um, tried to figure out how it compares to other restaurant chains. Like the– Everything I know [00:23:00] about the restaurant business really, I did work in one when I was much younger, but is, I get from watching The Bear and reading Anthony Bourdain’s books.

Tony Kynaston: Right

Cameron: Um, and I know a lot of it’s got to do with obviously how many customers you get in, but how much you make per customer, how many times you could turn over the tables in a night is your experience.

“Sorry, you gotta get out of here. We need new customers to sit in the table.” Um, but there’s other metrics in there, there. Did you read their, um, any of their financial reports?

Tony Kynaston: Oh I read the numbers It’s It was summarized for me by Gemini but yeah

Cameron: So they do have a range of metrics that they look at, and there are some industry-specific metrics. Um, revenue per available seat hour is a big one in the industry. It’s called RevPAS. Divides dining room revenue by the number of seats multiplied by the hours available. So if you were [00:24:00] turning over $12,000 through a 100-seat dining room over four hours, it’s about $30 per available seat hour.

So it sort of captures how much the customers are spending, what your occu- occupancy is like, and the speed that you can serve them and,

Tony Kynaston: Yeah

Cameron: Have you watched the, the last season of The Bear?

Tony Kynaston: I haven’t watched the first season

Cameron: All right. The la- the last season of The Bear was really good because, um, you know, a- actually the last, the entire last season is one day in the restaurant and, uh, things are going wrong.

But they’ve, they’ve. Basically, the f- first episode, a pipe bursts. They’re already broke, and the guy who basically is bankrolling the whole thing is gonna shut it down. And then, and they know they’ve got a big reviewer coming from a big newspaper, and thinking, hoping that’ll save them. And then in the morning, it’s big, it’s like a massive storm in, um, [00:25:00] Chicago, and one of the pipes in their kitchen bursts, and everything gets flooded, and all of their food gets wrecked, and, and their kitchen gets wrecked.

And they can’t buy new food because, A, you gotta have it ordered in advance, and B, they don’t have any credit, and they don’t have any capital. So they have to salvage what’s left, and then they have. And then people turn up late because of the storm, and they’re booked out, and then they double book, and they’ve, they’re bui- building.

Everything goes wrong that could go wrong. But then they’re coming up with creative ways of entertaining people before their table’s ready, and then entertaining ways to get them out quickly by setting up, like, this party in the back. “Hey, we’d love to invite you to a little private party that we’re having in the back.”

And then they’re, you know, they’re selling, they’ve got coke and weed and everything out the back just to keep. It’s, like, crazy. Absolutely bonkers. Anyway, enough of that. That’s, uh, that’s all I know about the restaurant business. So drilled down into it a little bit with GPT and [00:26:00] looked at some of the metrics that you can probably, probably guess.

Guest visits, average spending per person, sales at established restaurants. Oh, thank you, lady. Speaking of good service, look at that. My smoothie got delivered. My lady in hot pants

Tony Kynaston: Where’s mine

Cameron: Hot pants or smoothie? Get your own hot pants. Yeah. I’ll send it to you. It’s in the mail. Um, sales at established restaurants, like taking out new openings, that kind of stuff, existing location sales year on year

Tony Kynaston: yeah that’s the one I focused on

Cameron: Yeah, it’s not good

Tony Kynaston: No same-store sales Yep

Cameron: Average weekly sales per restaurant, food and labor costs as a percentage of sales, restaurant level profit margin, and then return on new restaurants and refurbished restaurants.

But when I look through the annual report, um, it’s interesting. They talk about their key financial performance indicators, which break down as average restaurant unit volumes, which are average sales [00:27:00] per restaurant to measure changes in customer traffic, pricing, and the development of their brand. And the second is comparable restaurant sales year over year to figure out are they doing better this year than last year.

And it’s, uh, kind of a really, many ways concerning story, which again, is why they’re cheap. For the year ending 2025, uh, calendar year, their reporting year, total revenue was about four billion, up slightly from 2024, but two hundred million less than 2023. But the most concerning line is their income from operations.

2023, their income was two hundred and eighty-two million, fell to a hundred and forty million in 2024, and then down to thirty-seven million in 2025. So that’s, uh, what? S-s-nearly a, not a nine, eighty percent drop in revenue over two years. Now, there’s a bunch of reasons for that

Tony Kynaston: [00:28:00] they sold the Brazilian the share in the Brazilian business

Cameron: That’s part of it, but I think even if you take that out of it, it’s not good There’s restaurant closures, weaker sales at established restaurants. Meanwhile, costs are going up, wages, restaurant supplies, advertising costs, et cetera. Labor costs are up as well as, uh, wages. But when you get down into the details, it’s interesting.

The average restaurant unit volumes for Outback Steakhouse have barely moved from 2024 to 2025. It’s like four million per restaurant, um, both years. Carrabba’s went up slightly, three point six to three point seven million. Bonefish actually went backwards, three point two to three point one four five.

Just a small amount, but going backwards nonetheless. Fleming’s went up slightly, five point eight to six million, and if you sum them all up, though, it kind of balances out. Really, their year-on-year [00:29:00] growth is pretty much neutral. Yeah, flat. But when you look at traffic, it’s worse. 2024 fiscal year, traffic dropped in all of their restaurants.

Outback dropped four percent, Carrabba’s dropped three, Bonefish dropped seven, Fleming’s dropped six, and then in 2025 they all dropped again. Outback dropped one, Carrabba’s was flat, Bonefish dropped five, and Fleming’s dropped one. So you’ve got a business where you’ve got less traffic, costs are going up, um, sales are basically neutral.

Prices are going up as well for. You know, they’re putting up their prices of their product, but it’s not moving the dial. The average check per person in Outback, which they report, was up zero point seven percent in 2025. Yeah, up roughly about three percent. But, um, I assume that’s mostly inflation putting your prices up, Ryan

Tony Kynaston: Well [00:30:00] it’s not even inflation isn’t it That’s the point I kept coming back to was they go Oh this is terrific We’ve turned the corner We’ve got 2 same stores sales growth Yeah but inflation’s running at three so you’re actually going backwards

Cameron: Yeah, right. Well, if the restaurants are go- the other ones outside of Outback are going up three, so they’re basically inflation, um, staying neutral. Yeah, but it’s not, uh, it’s not, “Hey, the businesses are doing better,” right?

Tony Kynaston: Hmm

Cameron: you look at their margin statement, it’s a little bit depressing, too. Um, for the whole group in the 2025 year, income from operations was slightly less than 1%, 0.9%.

When they take off accounting expenses, uh, doing GAAP stuff, um, they had a net income of 0.2%, which is better than the -3.2% they had in 2024, but you’re still running a business pretty much on a zero margin. So my question to GPT [00:31:00] was, is that normal for these sorts of chain restaurants?

Tony Kynaston: Yeah Are they all doing it or is it just a sort of a one-off Yep

Cameron: it was like, no, these guys are doing it really bad. Um, so Bloomin’, uh, it’s unusually weak is GPT’s wording with major restaurant chain peers. Restaurants often have thin margins, but these operators were keeping substantially more of each sales dollar. So if you look at the fiscal 2025 numbers as an example, Bloomin’ Brands net profit margin 0.2%, as I said.

Texas Roadhouse, 6.9%. Brinker, which owns Chili’s and Maggiano’s, was 7.1%. And Darden, which owns Olive Garden and LongHorn, was 8.7%.

Tony Kynaston: And that’s the comparator usually LongHorn restaurants are the comparator for Outback Steakhouse usually

Cameron: I’d never heard of LongHorn before. Right.

Tony Kynaston: yeah

Cameron: restaurant

Tony Kynaston: Yeah I haven’t heard I don’t think I’ve been in [00:32:00] one but the analysis I saw was that you know you’re not even doing as good as LongHorn

Cameron: Right

Tony Kynaston: similar sort of offering

Cameron: Bloomin’ kept about 20 cents per $100 of revenue, and these others are keeping $7 to $9. So yeah, they’re, they’re much less profitable than these other chains. So, um Dot to dot to dot. I could, I could go into the more of the details of that, but I don’t think it’s necessary. So, Stockopedia’s interesting.

It shows their total revenue was up in 2025, and operating profit jumped from 3.8 million to 37 million in 2025. And for its trailing 12 months, they’ve got revenues already higher than 2025, 3.98 billion for the TTM, and they’ve still got, what? A few months left to [00:33:00] go. Operating profits are already 47.6 million for TTM.

The, um, big jump, uh, from 2024 to 2025 is because they did this debt extinguishment in 2024. Um, which had something to do with the Brazil stuff. They had, um, $136 million loss on extinguishment of debt from 2025 convertible notes,

Tony Kynaston: Mhm

Cameron: so that was why the 2024 number was so low. But, um, so they, they’re talking about the turnaround, right?

So the chief executive is a guy called Mike Spanos. He announced a turnaround in November 2025, centered on Outback. Um, in the March 2026 annual report, he says, “Our turnaround is built on four strategic platforms. Number one, deliver a remarkable dine-in experience. Number [00:34:00] two, drive brand relevancy. Number three, reignite a culture of ownership and fun.

And number four, invest in our restaurants.”

Tony Kynaston: It’s like when you pull these headphones off does it say breathe in breathe out breathe in. It’s like isn’t that the, they are the four things you need to do in a restaurant isn’t it.

Cameron: Pretty much, yeah. How are you gonna do that? Ah, like it’s, it’s like Ray and I always laugh about the guys that assassinated Julius Caesar, when they were having their s- their, their planning meeting. Step one, kill Julius Caesar. What’s step two? Look, let’s not get ahead of ourselves here, right?

We don’t need to worry about that. Let’s just get step one done, then we will sit down and think about what step two is.

Tony Kynaston: Did you see the industry that Mike Spanos came out of?

Cameron: No, but the name sounds familiar. Oh, where’d he come out of?

Tony Kynaston: The airline industry. [00:35:00] Expect you please put your tray tables down. We’ll be bringing the meals.

Cameron: Well known for their,

Tony Kynaston: airline food.

Cameron: yeah, well known for their stellar dining experiences. Uh, anyway, look, that’s the bottom line is, uh. Look, it does seem to, they seem to be having a better year this year than they had last year. Now, you would expect though, that with all of the cost of living stuff that’s not going well in the United States, gas prices are up, diesel prices are up,

Tony Kynaston: Mm-hmm.

Cameron: uh, people are doing it tough, uh, K-shaped economy, et cetera, et cetera.

Depending on how much Outback Steakhouse Donald Trump’s getting into the White House, I mean, he alone could probably eat enough to save their bottom line the way his stomach line is looking. I don’t know. I don’t know, um, if the economy is going in the right. I mean, on s- on one hand you always hit,

Tony Kynaston: they’d affect the other restaurants too. That’s why the comparatives are so important.

Cameron: Hmm. Well, I guess what I’m saying is it’s [00:36:00] not like this is. You would think on one hand this is gonna be a boom time for dining out. But the flip side is you always hear that, um, poor people in America go and eat out. They, they dine out a lot. Like, uh, the. I, I don’t understand it, but, uh, it seems to be a thing.

Tony Kynaston: Yeah I don’t know if they’re going to Outback Steakhouse or if they’re going to um what’d you say before Taco Bell.

Cameron: A McDonald’s?

Tony Kynaston: McDonald’s yeah.

Cameron: Hmm.

Tony Kynaston: Or getting a hamburger or whatever yeah. Interesting about the turnaround though. So you know the history of that? So that was, did you come across Starboard as the company, the activist investor who got involved?

Cameron: No.

Tony Kynaston: Okay. So all these problems have been known for a while. Um, Starboard took a position, agitated for change, out the the the plan basically for how to fix it which was to sell Brazil. See, Brazil’s very interesting. So they actually made a lot of [00:37:00] money rolling out Outback Steakhouse in Brazil. Brazil actually has a culture of eating a lot of meat and a lot of barbecued meat so it kind of fitted nicely. They also made the right decision to put a lot of the restaurants in shopping malls which are a thing in Brazil because they’re air-conditioned, they’re safe. A lot of people go to um shopping malls a lot rather than going to their local store where they could be held up at gunpoint on the way home. That was the crown jewel. Starboard came on board. They said sell Brazil, put the money back into refurbishing the Outback restaurants. And the board said no thank you. Kept agitating. Eventually they did turn over management. Spanos came in, sell all of Brazil, because really Brazil was what was keeping the company afloat. That, that was the the cash generator. So he sold two-thirds and he’s put that money [00:38:00] into trying to refurb the Outback chain, doing things like increasing the number of waitstaff so a waiter has four booths to look after and not as many as they had before, refurbing the kitchens because apparently the equipment was old, that kind of thing. So just basic restaurant stuff. But they never got to it because they had no money.

Cameron: Right.

Tony Kynaston: Interestingly enough the company was founded by the four founders and then eventually it was bought by Bain. It kind of had gotten to the stage where it was big in the US and hadn’t expanded internationally. So the um the four founders, I think s- three of them might have stayed in uh with Bain. They started expanding globally and Brazil was just like a goldmine for the company. They made so much money in Brazil. Then Bain put it back on the market and made a lot of money from the refloat and that’s when the problems started, cause everything, you know, they tried to expand overseas in some other countries, didn’t go well. Um [00:39:00] the the you know the company was a bit more indebted. The the had been taken out of it. So you know it’s not not a great idea to buy a float from a PE company. They’ve often gotten all the growth out of it. So this company is ex-growth. Starboard came in and they said well it’s ex-growth, you know we can do what a PE company would do. We let’s sell assets, pay down debt, um make the make the core of the company better and then we can go eventually and borrow and buy the next growth asset. This game’s all about getting the next Chipotle before it becomes big or whatever it is. So um was the game plan and the founders or the s- the shareholders had enough sway to reject Starboard. They lost a bit of money actually. They bought in at a high price and eventually left with their tail between their legs, sick of fighting. Uh they they took a bath on their shareholding. And now the management changed, the new guys come in and he’s doing pretty much what Starboard [00:40:00] said. Um but it’s, there’s still a long way to go. There’s there’s still, there’s still, I think there’s still, to me this is another PE buyout company because you look at the sum of the parts and the valuations. I saw if you put a valuation on what’s left in Brazil, if you put a valuation particularly on Fleming’s, Starboard said they should, or they they should sell Fleming’s because it’s worth four or five hundred million dollars, you compare it to other like restaurants. Um and then you look at, I think it was the other ones. If you if you added them all up on a on a brand by brand basis you get to about one point four, one point five billion dollars. Cap’s eight hundred plus change and then the difference is the debt and liabilities which is always a big thing, um on the books for uh this kind of business. But a PE company would come in, sell something like Fleming’s, pay off the debt, go to the landlords and say well we’re shutting the doors pal, you’re not gonna get paid, let’s renegotiate the deal. Or they go into Chapter Eleven where you can walk away from [00:41:00] the deals, from the leases. You close the stores you don’t want, you keep the ones you like, you throw a bone to the le- the landlords of the ones you like and you go from there.

Cameron: Yeah.

Tony Kynaston: That’s what management has to do and that’s what a PE company can come back in and do. So I, that’s how I view this company going forward.

Cameron: Yeah. I had the s- I, same conclusion that it’s a takeover sort of target really.

Tony Kynaston: Workout.

Cameron: Yeah.

Tony Kynaston: No growth workout company.

Cameron: Um, before I wrap up the financials story, um, how, you know, their last reporting quarter, June 26, uh, sales were up 1.4% at established restaurants, but guest visits were still down 2.8%. Average spending per p- average spending per person was up 4.2%. But guest visits were down. Um,

Tony Kynaston: What’s inflation [00:42:00] running at in the US at the moment, three to four?

Cameron: I would imagine so, yeah.

Tony Kynaston: So it’s still, are down, inflation’s looking, making the the guests that are going there look like they’re spending more and they are but they’re not buying more. They’re just having to pay more for it.

Cameron: Yeah, and costs are probably up to match that.

Tony Kynaston: Yeah.

Cameron: I was gonna compare that to Texas Roadhouse Group for their June reporting quarter. They- their sales were up 6.2% and guest visits were up 3%. And LongHorn, uh, they report the quarter ends August, was up 6.2%, guest visits were up 1.6. Um, Chili’s June 26 reporting period, sales up 5.6%.

Guest visits were positive but not quantified in the release. So again, even compared to those businesses, they’re doing very, very poorly. So yeah, still got a lot of [00:43:00] problems inside the business.

Tony Kynaston: Yeah.

Cameron: I should also point out that the price, the share price tanked, uh, the beginning of 2024. March 2024, they were trading about $28.

Uh, then they went into a steep decline for two years, which bottomed out March of this year at $5.43. They’ve doubled since then. They’re roughly about 10 bucks, just shy of 10 bucks at the moment. So it’s cheap on our buy list and for a reason. Like, it’s obviously struggling as a business. When I did my analysis on the weekend, share price was $9.95.

As you said, the market cap was about 852 million against about $320 million of trailing annual operating cash flow. So they’re, they had a Pr/OpCaf of 2.66.

Tony Kynaston: Yeah.

Cameron: and a quality score of 69%, QAV score of 0.26.

Tony Kynaston: Which [00:44:00] I think is interesting Cam because it, it’s a ATM, it’s a cash-generating machine.

Cameron: Yeah.

Tony Kynaston: Something that PE would love. So even when it’s not being run well by someone from the airline industry who doesn’t have a background in the restaurant industry, it’s still throwing off heaps and heaps of cash.

Cameron: Yeah. Yeah, like it’s, it seems to be dying slowly, and we’ve, we’ve talked about businesses like this before on the show. You know, they’ve been around a while. They’re sort of in a slow decline, but they’re still throwing off a lot of cash.

Tony Kynaston: Hmm.

Cameron: So somebody’s gonna look at that. What’s that?

Tony Kynaston: Well they’ve got to rebrand it to the Kiwi Outback. Ever been to New Zealand? No? Kiwi. Let’s, Kiwi wings.

Cameron: Yeah.

Tony Kynaston: yeah.

Cameron: Quick, get Sam Neill on the phone.

Tony Kynaston: burgers.

Cameron: Oh, wait, he’s dead. Shit.

Tony Kynaston: Takeaway. He he can do it.

Cameron: Are there any famous New Zealanders left?

Tony Kynaston: Taika, Taika.

Cameron: Oh, Taika Waititi. Get Taika [00:45:00] Waititi on the phone. Yes. Yeah. Yeah.

Tony Kynaston: Yeah.

Cameron: Get Chris to be the front man for it. Is he Kiwi? No, but doesn’t matter. Who knows? Who cares? Oh, uh, Crowded House. Crowded H- Russell Crowe, yeah. Crowded House.

Tony Kynaston: name for a b- a steak chain.

Cameron: Oh, yeah. Yeah.

Tony Kynaston: get out quick, Crowded House.

Cameron: Book in advance, it’s a crowded house.

Yeah. Don’t dream it’s over, have another kookaburra win. Um, numbers at a glance, uh, just so people know how it scored. Um, doesn’t have a qualified audit. Um, quality rank Stockopedia-wise is a 70, uh, so we scored it for that. The stock rank is a 97, surprisingly, so we scored it for that. The F score’s a six.

Not too bad, scored it for that. The price is not less than our intrinsic value number [00:46:00] one. Our IV1 is, uh, $6.97. Price was 9.95, couldn’t score it for that, but it did get a score for price being less than IV2. IV2 was $10.02, so it scraped in for that one. Uh, price is, uh, not below book.

Uh, not below book plus 30 either. Um, does have a new three-point upturn, so I could score it for that. PE, uh, is not, uh, below dividend yield. Yield is not above the benchmark debt rate. Forecast IV is not greater than twice the price. Uh, and that’s it. So, um, I added it as a QAV Light option this week for our QAV Light subscribers to have a look at.

And, uh, we’ll see what happens with it.

Tony Kynaston: Yeah.

Cameron: Maybe they should stop [00:47:00] deep-frying every. Have you ever, have you ever been to New Orleans?

Tony Kynaston: Yes. Yep.

Cameron: I, I’ve been there quite a few times. Loved it. Um, and I remember having a deep-fried Mars bar once at a place called Ma- Mother’s in New Orleans. Asked my taxi driver, like, “Where, where’s the best place?

Where, where do all the locals go?” He goes, “Go to Mother’s.” And so we went to Mother’s, me and a bunch of guys from Microsoft, and had deep-fried Mars bar, which was absolutely bonkers. But this is back when I weighed 130 kilos, and that’s probably why I weighed 130

Tony Kynaston: you can. Well

Cameron: kilo.

Tony Kynaston: what they should do. They should they should call it um Donald’s Outback Restaurants.

Cameron: The,

Tony Kynaston: deep-fried butter, deep-fried.

Cameron: the Donald J. Trump’s Outback Steakhouse.

Tony Kynaston: Yeah gold decor.

Cameron: Yeah.

Tony Kynaston: Yeah.

Cameron: But cheap gold that you get from China. Um, fake gold.

Tony Kynaston: Yeah. Can run the place on [00:48:00] Russian-supplied diesel.

Cameron: Well, that’s BLMN. Let’s, uh, see how it goes. I haven’t looked at, uh. Let me, let me, before we go, I’ll just have a quick,

Tony Kynaston: like it’s got to be a takeover target. All the

Cameron: Yeah. Yeah. Yeah.

Tony Kynaston: stuff up really badly with this refurbishment then yeah it’s gotta, it’s it’s I can’t see it going any lower.

Cameron: Yeah. Um, just looking at the stocks we’ve talked about recently. APA, we talked about last week, is up 8.5% since last week, so that’s had a good run. God. Uh, Caleres, the shoe company, is up 1.8%. Atlanticus is down. Village Supermarket’s down. OneMain Financial is down 11%. Ardent Health is up.

Tony Kynaston: You know what I was gonna say too. Sorry to interrupt. You you got another stock with a Brazilian reference in it.

Cameron: Yes, I know. I know. Gotta love Brazil. Wonder what’s going on with the election there. They haven’t had the second round yet, I don’t think. But speaking of which, Petrobras is up [00:49:00] 42%, Coles is up 23, mentioned them earlier. Mm. Who would’ve thought?

Tony Kynaston: the cost of living

Cameron: Yeah,

Tony Kynaston: going on. Wow.

Cameron: yeah.

Tony Kynaston: Maybe they can get the Coles MD to run Outback.

Cameron: Mm,

Tony Kynaston: run Bloomin.

Cameron: mm, he knows what’s going on.

Tony Kynaston: Hmm.

Cameron: Anyway, um, out of all the stocks that we’ve talked about since we started doing the American deep dives, uh, we’ve covered 72, 43 of them are up, 28 are down. Uh, so it’s about a 60% run rate, success rate, which is pretty much what we expect. So there you go. No surprises there. Tony, well, I’m gonna go and fry myself up a battered onion.

Tony Kynaston: I can’t eat onion anymore. My uh the guy who did my colonoscopy said uh not to eat onion.

Cameron: Because?

Tony Kynaston: Oh I got a list of things. Avocados, onions, um [00:50:00] potatoes, these are all the things that can lead to div- to diverticulitis.

Cameron: Yeah, really?

Tony Kynaston: Yeah.

Cameron: Wow.

Tony Kynaston: said to be wary of.

Cameron: Right.

Tony Kynaston: Hmm.

Cameron: Well, the other thing is, uh, Taylor sent me, my son Taylor, sent me a birthday present, which I got this week, which is a WHOOP strap.

Tony Kynaston: Oh yeah.

Cameron: You heard of the WHOOP?

Tony Kynaston: have yeah.

Cameron: I hadn’t, but, uh, I’m testing. I got it on Saturday after training, so I’m gonna take that along and whack it on my bicep today at training for the first time, see what it can tell me about how awesome I am.

Tony Kynaston: Does it sing Everything is awesome? There’s the

Cameron: we’ll see.

Tony Kynaston: Aura Ring and the Whoop Strap and there’s other ones too.

Cameron: got an Oura Ring, he wears that. Like I, uh, I’ve got the Apple Watch, right? Which I, I don’t wear it during training because probably gets smashed, but, um, I wear it all the time and I don’t see that this thing’s gonna add much [00:51:00] benefit over the fact that I can wear it when I train. So I think I’ll do that

Tony Kynaston: Yeah good Does it I think that uh does it track your sleep as well I

Cameron: It, it does, but so does my Apple Watch. So I, I asked GPT, “Is there any point in wearing this?” And it was like, “No, not really.” But, um, you know, and I, I, I’m sort of guessing how many calories I’m burning during training these days since I’ve lost a lot of weight, so it’ll be good for it to give me a benchmark on that, but

Tony Kynaston: Mm-hmm.

Cameron: that’s about it.

All right. Well, that’s, uh, that’s QAV America for this week, Tony. Let’s see if the world’s still around next week.

Tony Kynaston: Thanks, Cam

Cameron: Thank you. Happy hunting, everybody.