Bloomin’ Brands Inc., parent to the Outback Steakhouse brand, has noticed some pressures among consumers, executives said Tuesday.
The Tampa, Fla.-based company, which released earnings Tuesday for the first quarter ended March 31, like many in the industry has noticed consumers reacting to the economy, said David Deno, the Bloomin’ Brands CEO and president who announced his impending retirement on Tuesday.
“The lower-end consumer,” Deno said, has exhibited “some check management. … The more middle- or higher-class customer and casual-dining [customers] are still hanging in there pretty well. Again, we can see that in some of our trends.
“Fine dining is a little weak right now, but that was really frothy there for a couple of years,” Deno said, referencing the Fleming’s Prime Steakhouse & Wine Bar brand. “I don’t think that there’s necessarily anything wrong, shall we say, on the high end. But I’d say on the lower end, the consumer is facing some pressure.”
Deno said Bloomin’s top-line performance was driven by Outback and Carrabba’s Italian Grill.
“All of our technology and equipment investments, such as new grills and server handhelds, have been rolled out, and now our job is to leverage these investments,” he said.
“We feel very good about Outback’s performance and the direction of the brand, and we are in a state of continuous improvement,” Deno said. “All of our future enhancements will be grounded in the ‘No Rules, Just Right’ philosophy, and will stay true to the irreverent and adventurous spirit of the Outback brand.”
Deno said the company is putting more marketing dollars behind the brands “to improve our share of voice in a highly competitive market. Our multi-channel advertising strategy leverages analytics to ensure strong returns and maximizes our ability to connect with our customers.”
Another priority, Deno said, remains off-premises sales.
“This business has more than doubled since 2019, and currently represents 23% of our U.S. sales,” Deno explained. “We need to continue to pursue our off-premises business and grow in-restaurant sales. We are pioneers in the to-go space, and we continue to see strong demand in this highly incremental occasion. In addition, the success of our catering business at of our brands, but particularly at Carrabba’s, provides a runway for future growth.”
For the first quarter ended March 31, Bloomin’ Brands’ net loss was $83.9 million, or 96 cents a share, compared to net income of $91.3 million in the same period a year ago. Revenues were $1.195 billion, compared to $1.245 billion in the prior-year quarter.
In the fourth quarter 2023, Bloomin’ decided to close 36 predominantly older, underperforming restaurants and three U.S. and two international Aussie Grill restaurants. The company recorded a $13 million charge in the first quarter related to those closures.
“We expect to remodel 60 to 65 restaurants and open 40 to 45 new restaurants systemwide this year,” Deno said on the call, and “15 to 17 of these new restaurants will open in the United States. We know that upgrading our assets is a big part of improving our traffic trends, especially at Outback.”
First-quarter domestic same-store sales were down a combined 1.6%, with an increase of 0.4% at Carrabba’s and declines of 1.2% at Outback, 4.9% at Bonefish and 2% at Fleming’s. Same-store sales were down 0.7% at Outback in Brazil.
As of March 31, Bloomin’ Brands had 1,451 restaurants systemwide, including 1,162 company-owned and 289 franchised. The U.S. portfolio included: 669 Outback Steakhouses, 210 Carrabba’s Italian Grills, 166 Bonefish Grills, 64 Fleming’s Prime Steakhouse & Wine Bars; and six fast-casual Aussie Grills. The company had 336 international locations, primarily in Brazil and South Korea.
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