Bloomin’ Brands Inc. will be implementing changes to Outback Steakhouse as the parent company works to turn around its largest brand, executives said Wednesday.
The Tampa, Fla.-based casual-dining company, which also owns the Carrabba’s Italian Grill, Bonefish Grill, and Flemings Prime Steakhouse and Wine Bar, has listed the Outback turnaround as a major priority in the year ahead. That includes remodels, menu innovation, and more employee-side technology, according to Mike Spanos, Bloomin’ CEO.
“We have become too complex as an organization,” Spanos said on a Wednesday earnings call with analysts for the fourth quarter ended Dec. 31. “We need to simplify the agenda for both our people in the Restaurant Support Center and in our restaurants. When we simplify the agenda and focus the team on fewer things that are the most important, we serve our people so that they can take care of our guests.”
As part of the simplification, on Dec. 30, Bloomin’ completed its sale of 67% of its Brazil operations to a fund managed by an affiliate of Vinci Partners and retained a 33% interest.
The company also named Pat Hafner president of the Outback brand and Kelia Bazile president of the Carrabba’s brand and reduced its corporate staff.
Outback will also move away from limited-time offers.
“We are moving away from our LTO strategy that included non-core menu items with discounts presented every 10 to 12 weeks,” Spanos said. “We will transition to abundant value that is featured as part of our everyday menu offering.” Part of that is the Aussie 3-Course menu that is being promoted.
“We will measure success based on the guest intent to return, building frequency of visitation and gross profit dollars,” Spanos said.
Outback is also reducing the number of menu items in the off-premises channel, which totaled 24% of U.S. fourth-quarter sales, Michael Healy, Bloomin’ Brands chief financial officer, said.
Spanos said the off-premises channel is removing menu items that have low satisfaction, do not travel well, or create complexity for operators.
“It is critical that hot food is hot and cold food is cold in all channels,” Spanos said. “Eliminating these items will improve operational execution and guest satisfaction.”
Outback has partnered with tabletop ordering tablet provider Ziosk for pay-at-table and guest feedback. In test restaurants, about 80% of customers paid through the Ziosk tabletop unit, Spanos said.
“We can measure guest satisfaction by restaurant and by shift,” Spanos said. “With features like pay at the table, tap to pay with mobile wallet, and entertainment, Outback is offering guests a faster and simpler experience. We will have the rollout completed by the end of April.”
Spanos said the company will focus on Outback as a priority.
“Outback is our largest and most important brand,” he said, “and I will spend the majority of my time focused on that business.”
The includes slowing the pace of new unit development to focus on remodels and updates of existing restaurants, Spanos said.
“We have a repair and maintenance survey underway that is evaluating the current state of each restaurant and will be completed by the end of Q2, which will help inform our analysis on remodel scopes,” he said.
Healy said capital expenditures are expected to be between $190 million and $210 million in 2025.
“We are shifting our focus from new restaurant development to investing in our base business through maintenance and remodels that we can create more value from our existing operations,” Healy said.
For the fourth quarter ended Dec. 29, Bloomin’ Brands net loss was $79.5 million, or 94 cents a share, compared to a profit of $43.3 million, or 50 cents a share, in the prior-year period. Revenues were down to $972 million from $1.071 billion in the prior-year quarter.
Same-store sales were down a combined 1.1% in the United States, reflecting Outback Steakhouse down 1.8%, Carrabba’s Italian Grill down 0.9%, Bonefish Grill down 1.5%; and Fleming’s Prime Steakhouse & Wine Bar up 3%.
“We anticipate the next installment of Brazil proceeds to be received at the end of December this year to be approximately $96 million and intend to apply it to the revolver balance,” Healy said.
Bloomin’ Brands operates and franchises more than 1,450 restaurants in 46 states, Guam and 12 countries.
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