The owner of the Outback Steakhouse and Carrabba's Italian Grill casual dining brands, Bloomin' Brands (NASDAQ:BLMN), announced the suspension of its quarterly dividend today, at least for the first quarter. The move comes as part of its response to the coronavirus pandemic, with the company attempting to strengthen its cash position as much as possible in the face of COVID-19 related market chaos. The stock fell in pre-market trading, with the plunge in share value continuing after markets opened.
In addition to the dividend suspension, Bloomin' announced that it had drawn down almost its entire available revolving credit. This action boosted its available cash reserves to approximately $400 million. CFO Chris Meyer also declared that the company is taking other, unspecified steps to "tightly manage costs in this new environment." Increasing its cash reserve is intended to keep Bloomin' stable and flexible in a volatile situation, according to the company statement.
Late last year, Bloomin' inked an alliance with delivery company DoorDash, making off-premise sales spike 20% to 32% for its major brands. With the company planning increased emphasis on delivery (along with carry-out) in the face of COVID-19, the partnership could potentially help mitigate first- and even second-quarter revenue declines caused by the pandemic.
As part of this morning's announcement, Bloomin' Brands also said it was withdrawing its guidance for fiscal year 2020. The company says it will provide an update on these assorted financial measures during its Q1 earnings call. The earnings conference call date has not been set.