TAMPA Fla. In the first public look at Outback Steakhouse's financials since its parent company went private in a billion-dollar-plus buyout last year, it seems the casual-dining chain isn’t faring any differently than its peers.
Outback’s parent company, OSI Restaurants Partners LLC, booked negative revenue and same-store sales trends and a larger net loss than a year ago. It also recorded a $185.5 million provision for impaired assets and restaurant closures in its latest quarter.
At Outback Steakhouse, the company’s 976-unit flagship chain, systemwide same-store sales fell 5.6 percent for the quarter ended June 30, versus the same quarter a year ago. Systemwide same-store sales fell 5.0 percent at Carrabba’s Italian Grill, 8.0 percent at Bonefish Grill and 8.4 percent at Fleming's Prime Steakhouse & Wine Bar.
In a conference call on Friday, chief financial officer Dirk Montgomery cited the “unusually challenging consumer environment” for weak traffic trends and reduced profitability. He also cited the depressed economic conditions in Florida and California, where Outback and OSI’s other concepts operate a large number of restaurants.
Montgomery said traffic counts fell between 6.0 percent and 10.0 percent across all concepts and that menu price increases totaled between 1.5 percent and 2.5 percent for the quarter.
“We expect a very challenging [casual-dining] segment and economic environment for the remainder of the year,” he said.
To drive consumer traffic and increase profitability the company has initiated cost-saving techniques and plans to use additional marketing and lower-priced menu items, including a $9.99 dinner promotion at Outback that includes a 6-ounce sirloin and two side items.
For the June-ended quarter, OSI posted a net loss of $176.7 million, mainly on the large asset impairment charge. A year ago, the company posted a $10.0 million loss. Total revenues in the latest quarter fell about 4 percent from a year ago to $1.02 billion.
While OSI is no longer a publicly traded restaurant stock, its public debt requires financial reporting with federal regulators.
The company operates or franchises a total of 1,493 restaurants under its various brands. It reiterated plans to sell or otherwise divest the company’s “non-core” chains, including Roy’s, Cheeseburger in Paradise, Lee Roy Selmon’s and Blue Coral.