Outback Steakhouse parent company Bloomin’ Brands had a better-than-expected first quarter of 2023 which ended March 26, with same-store sales up by 5.1%, despite continued traffic challenges, mostly driven by changing consumer behavior in a post-pandemic world. Bloomin’ Brands, along with the rest of the casual-dining industry, is continuing to parse the category’s role in consumers’ lives as they look to balance between the in-store experience and off-premises convenience.
“We’re seeing that as we open new restaurants, the volume is way exceeding what our base is,” Bloomin’ Brands CEO David Deno said during Bloomin’ Brands’ earnings call on Friday. “The customers are there. Casual dining is not fading away –we’re very bullish, especially with carryout and delivery and the digital opportunity is there and it’s big.”
Deno said that the company is addressing traffic challenges by improving in-store technology, including the use of new kitchen equipment, and tablets to make servers’ jobs easier and a renewed focus on a brand equity-focused marketing strategy. He added that “now is the time” to build healthy traffic back up from now into 2024, and to continue a renewed focus on off-premises strategies.
“The total off-premises business was 23% of U.S. sales in Q1, and our third-party delivery business continues to perform well,” Deno said Friday. “Importantly, off-premises profit margins are comparable to margins of the in-restaurant business. In addition, catering is becoming an important and growing opportunity for our brands.”
Like many national chains, Bloomin’ Brands said Friday that the company is shying away from pre-pandemic discounting and moving more toward everyday value in an effort to bring average guest check up. Overall, Bloomin’ Brands has taken moderate pricing, especially as compared with their competitors, and pricing increases still remain in the single digits as the company remains aware of consumers’ inflationary concerns, and will be taking “as little pricing as possible” in the back half of the year.
“Value is service plus food divided by price and if we can offer consistent value, then consumers respond, especially when you look at what the digital marketing environment provides,” Deno said Friday. “If we can do that, then we don’t have to rely on pre-pandemic deep discounting […] We want to offer great value with the programs we already have like the Outback combos that we offer that very few competitors have.”
Bloomin’ Brands reported revenue growth of 9.1% to $1.24 billion for the first quarter, up from $1.14 billion the same quarter the year prior. Net income was $93.4 million or $0.93 per share, up from $77.7 million or $0.73 per share the same quarter the year prior.
The Tampa, Fla.-based company ended the quarter with no net store openings or closures systemwide, with 1,471 restaurants in its portfolio.
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