Outback Steakhouse parent Bloomin’ Brands Inc. is working on increasing sales and traffic, completing its rollout of handheld devices for servers and making other technological investments, executives said Thursday.
Executives at the Tampa, Fla.-based company, which also owns the Carrabba’s Italian Grill, Bonefish Grill, Fleming’s Prime Steakhouse & Wine Bar and Aussie Grill concepts, said in a fourth-quarter earnings call that they were also targeting marketing to drive frequency with Outback’s “No Rules, Just Right” platform, adding sales layers with social hours at the fine-dining Fleming’s and brunch at Bonefish and expanding a remodeling program this year.
David Deno, Bloomin’ CEO, said the company has made investments to improve execution and consistency in its restaurants.
“We've completed the rollout of handheld technology for our servers,” Deno told analysts. “In addition, we continue to roll out new cooking technology, including advanced grills and ovens. We will complete the rollout of the new technology in the third quarter. These innovations will further improve guest experience leading to increasing customer preference and frequency.”
Deno said the Bloomin’ concepts in 2023 would deploy marketing designed to build brand equity and drive frequency.
“Outback is bringing back the ‘No Rules, Just Right’ platform,” he said, referring to the campaign that was launched in 2013.
“We are deploying additional marketing dollars to support the launch,” Deno said, “but this is more than just marketing: It's an attitude. It’s how we reenergize our restaurants with new food offerings, exceptional service and — most importantly — it ties back to our heritage. ‘No Rules, Just Right’ is aimed at highlighting our great menu and the everyday value that we offer to our guests.
New sales layers are also planned to complement the work at Outback, he said. Fine-dining Fleming’s is introducing social hours with drink and food offerings in the early evening and Bonefish is returning to brunch service. “We'll provide more details and additional sales layers at all of our brands as they progress,” he said.
In addition, Deno said 50 Outback Steakhouse restaurants and 50 units of the other brands will be remodeled this year.
“We intend to remodel over 100 locations this year at the beginning of a multi-year effort to touch a large percentage of our business,” he explained. “We know keeping our assets looking at their best, along with our ongoing relocation program, is a key element to growing traffic. All this is about bringing in restaurant traffic back to pre-pandemic levels.”
Deno said that Bloomin’ is dedicated to becoming a more “digitally savvy company,” especially with 76% of off-premises sales in the fourth quarter coming through digital channels.
Chris Meyer, Bloomin’s chief financial officer, said off-premises channels made up 24% of U.S. sales in the fourth quarter, slightly lower than in the third quarter.
“Given the emphasis on special occasions we tend to see in Q4 and Q1,” Meyer said, “this change was expected and was primarily a migration from our curbside business to in-restaurant dining.
“Importantly,” he added, “the highly incremental third-party delivery business was flat from Q3 at roughly 12% of U.S. sales. In terms of brand performance, Outback total off-premises mix was 27% of sales and Carrabba's was 33% of sales. Off premises remain sticky and is a large part of our ongoing success. It will be a key part of our growth strategy moving forward.”
For the fourth quarter ended Dec. 25, Bloomin’ Brands net income was $60.1 million, or 61 cents a share, compared to $63.2 million, or 59 cents a share, in the same period past year. Revenues in the quarter were up 4.6% to $1.095 billion, compared to $1.047 billion in the prior-year period, driven in part by a $33 million in international revenue because of improvements in Brazil, Meyer said, and same-store sales increases in the United States.
Fourth-quarter U.S. same-store sales were up a combined 1.4% with increases of 0.9% at Outback Steakhouse, 2.8% at Carrabba’s Italian Grill, 0.5% at Bonefish Grill and 3.1% at Fleming’s Prime Steakhouse & Wine Bar. Same-store sales at Outback in Brazil were up 15.3% in the quarter, the company reported.
Bloomin’s 2023 financial outlook includes a benefit from a legislative action in Brazil, enacted in response to COVID-19 closures, that provided certain industries a 100% exemption from federal income tax and federal value-added tax on revenues, known as PIS and COFINS, for five years. Bloomin’ owns 137 Outback restaurants in Brazil as well as other brands such as Abbraccio and Aussie Grill.
Meyers said a Brazil court affirmed the exemption for Bloomin’s operations in the country. The PIS and COFINS exemption is expected to generate a benefit of about $17 million in 2023, and this benefit is exempt from federal income tax in Brazil. In addition, the exemption from federal income tax is also expected to generate an approximate tax benefit of $6 million in 2023 for a total of about 25 cents per share, Meyer said.
As of Dec. 25, Bloomin’ Brands Inc. owned, operated and franchised 1,471 restaurants in 47 states, Guam and 13 countries. In the United States, Bloomin’ had 693 Outback units in the United States, 218 Carrabba’s, 180 Bonefish Grills, 65 Fleming’s and seven fast-casual Aussie Grills. Internationally, it had 308 restaurants.
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