Bloomin’ Brands Inc. stock fell 9 percent in early morning trading on Wednesday as the owner of Outback Steakhouse said same-store sales declined 0.3 percent at its four concepts.
Same-store sales increased 0.3 percent at Outback in the quarter ended June 25 despite what CEO Liz Smith said Wednesday was a “sequential increase in traffic” at the chain from the first quarter.
And Smith said she expects that to continue to improve. “We anticipate [traffic] is going to build throughout the year” at Outback, Smith said on the company’s earnings call Wednesday.
In addition to the Outback results, same-store sales increased 0.4 percent at Carrabba’s Italian Grill and fell 1.3-percent at Fleming’s Prime Steakhouse and 2.6 percent at Bonefish Grill.
Smith said the company is “disappointed” Bonefish’s “strong customer satisfaction scores did not translate into better results.” But she is “confident in our ability to grow the brand over the medium and long term.”
Revenues at the Tampa-based Bloomin’ Brands decreased 4.2 percent to $1 billion, from $1.1 billion. Net income increased to $35.6 million, or 36 cents per share, from a loss of $9.1 million, or 8 cents, in the same quarter a year ago.
On the call, Smith said that casual-dining sales have been improving so far this year. But she said that traffic has not improved along with it.
She blamed part of the problem increases in new restaurant openings. “Excess capacity pressures traffic at existing restaurants.,” Smith said.
But she also said that more people are eating at home.
“We’re seeing a growing prevalence of dining in home, at levels not seen since 1992,” she said. “The good news is that it’s not limited to cooking at home.”
Bloomin’ has made major investments in delivery in its bid to capture these customers. The company has delivery available in 250 locations. And it will continue making investments to improve service.
Smith said the company is “pleased with the consumer response” and the overall results of its delivery efforts so far. “We plan to invest in systems, infrastructure and people to accommodate higher volumes … and capture a larger share of this opportunity,” she said.
The company is also pleased with the results of its DineRewards loyalty program, which now has 3.9 million members. The company said that the loyalty program is generating a 1 percent to 2 percent traffic lift.
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