BLMN - Bloomin' Brands: Hold As Epidemic Exposes The Fragile Financials
Investment Thesis
With more than half of the U.S. population urged to stay indoors amid the ongoing Coronavirus outbreak, the dine-in restaurant industry is in tatters as patrons prefer pick-up or delivery. Despite having an off-premise business comparable in size to those of peers, Bloomin' Brands, Inc. (BLMN) has substantially underperformed them partly due to its weak balance sheet. Low on liquidity and highly leveraged, the company immediately drew down the available credit facility and suspended the dividends as the outbreak dragged on. A credit downgrade ensued regardless.
Unless there is a sustained and sharp