Outback Steakhouse parent company Bloomin’ Brands has become the latest brand to increase prices in response to tougher-than-anticipated inflationary pressures and growing labor costs. In a fourth quarter earnings call on Friday, the Tampa, Fla.-based company announced its strong results for the quarter ended Dec. 26, 2021 with total revenues up 28.9% from the same quarter the year prior, driven by higher same-store sales.
As in-restaurant dining recovered year-over-year, U.S. same-store sales grew 27.9% compared to 2020, and 5.9% on a two-year basis. Anticipating this massive rush back to the dining room, Outback Steakhouse did not have to have as much holiday promotional activity as the brand did in Dec. 2019.
But despite a strong quarter, Bloomin’ Brands is anticipating another menu pricing increase, CEO David Deno said Friday morning. The restaurant company joins countless others that have raised prices to combat ballooning labor and commodity costs, as well as overall economic pressures due to inflation.
"To address the inflationary headwinds, we have taken pricing actions across our concepts," CFO Chris Meyer said Friday. "With the pricing we took in Q4 and an expected increase later this quarter, our total effective pricing will be 5%. We would expect to maintain this level of pricing into the fourth quarter of 2022 when we will reevaluate our go-forward strategy. It became clear that the 3% pricing we previously discussed would not be enough to offset the increased inflationary pressures our industry is facing. Given that we had not taken a material menu price increase since 2019, we are confident that 5% is appropriate."
Bloomin’ Brands has been able to mute some of the new pricing as caused by labor challenges, thanks to investment in front of the house and back of the house tech, designed to cut labor costs for both servers and kitchen staff, like advanced grills and ovens and handheld POS systems. Additionally, the company has been focusing more on off-premises sales, with 77% of off-premises sales now coming through digital channels.
“We hope we won’t have to take much more than that,” Deno said. “Attachment is up, people are trading in for [more expensive] or larger cuts of steak.”
As a result of traffic growth and increased prices, average check is up significantly on a two-year basis at all four Bloomin’ Brands: 7% at Outback Steakhouse, 8% at Carrabba’s Italian Grill, 4.4% at Bonefish Grill, and 10.8% at Fleming’s Prime Steakhouse & Wine Bar.
Overall, revenues at Bloomin’ Brands grew 28.9% year-over-year to $1.5 billion, while net income grew from a loss of $14.2 million or $0.02 earnings per share in the fourth quarter of 2020 to a gain of $63.2 million or $0.60 earnings per share in the fourth quarter of 2021. Bloomin’ Brands had a net total of 11 restaurant openings in the fourth quarter of 2021, and ended the fiscal year with 1,454 restaurants.
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