Bloomin’ Brands Inc., parent to Outback Steakhouse, has noticed a softening consumer environment and will focus on simplifying its menu offerings in the second half of the year, executives said Tuesday.
The Tampa, Fla.-based casual-dining company, which released earnings for the second quarter ended June 30, said the period was “softer than anticipated,” according to David Deno, Bloomin’ CEO.
“All of our technology and equipment investments, such as new grills and server handhelds, have been rolled out, and we are building on these investments,” he said.
But the consumer is being choosy about where they are spending, he said.
“Once they choose to come in our restaurants, we’re not seeing a large trade down or mix change or anything like that,” Deno said.
Outback currently has a limited-time offer at the entry-price point of $14.99, “the lowest offering of the year,” he said.
“Three courses for $14.99 is an exceptional offer,” Deno added. “We are not adjusting our strategy to go after deep discounting, rather we feel this is best for the strength and the health of the brand long-term. We are focused on delivering offerings that are only available at Outback. Importantly, they provide an attractive value to our customers. They are promotions that we can own that connect with our guests and drive traffic in difficult times.
“We anticipate LTOs that have similar price points in the near-term,” he said, “and we know we must continue to spend on marketing to maintain our share of voice.”
Outback will look to simplify menu offers, reduce the number of items, and target higher satisfaction, Deno noted.
“At the same time, we are looking at selectively adding new differentiated items that provide abundant value,” he said. “Taken together, this will likely result in a more simplified menu at Outback with fewer items and higher value. We do not want to share too much detail for competitive purposes, but work is under way, and we’ll be able to share more in the upcoming quarters.”
Michel Healy, Bloomin’ Brands’ chief financial officer, added: “We know our LTOs must be more value-focused to take share in this environment, and our second half promotional calendar reflects that.”
Deno also said the Bloomin’ concepts will continue to address the off-premises business, which was 24% of U.S. sales in the second quarter.
“This business has more than doubled since 2019 and is an important sales channel,” he said. “We need to continue to pursue our off-premises business and grow in restaurant sales.”
Catering business is expanding at all Bloomin’ brands, particularly at Carrabba’s Italian Grill.
“Their Q2 catering business has increased approximately 180% over the last two years and clearly demonstrates a runway for future growth,” Deno said.
Healy noted that, “the highly incremental third-party delivery business” had increased, and it is now “14% of total U.S. sales, which was up from 12% in Q2 2023, driven by our growth in catering.”
For the second quarter ended June 30, Bloomin Brands’s net income was $28.4 million, or 32 cents a share, compared to $68.3 million, or 70 cents a share, in the same period a year ago. Total revenues were down 2.9% to $1.119 billion, compared to $1.153 billion in the same prior-year quarter.
In the second quarter, Bloomin’s domestic same-store sales were down a combined 0.1% with increases of 2% at Carrabba’s Italian Grill and declines of 0.1% at Outback Steakhouse, of 2% at Bonefish Grill, and of 1.1% at Fleming’s Prime Steakhouse & Wine Bar. At Outback in Brazil, same-store sales were down 1%.
Deno said Bloomin’ planned to relocate and remodel more restaurants in 2024.
“We expect to remodel 60 to 65 restaurants and open 40 to 45 new restaurants systemwide this year,” he said. “Fifteen are new Outback Steakhouse restaurants and one is a new Fleming’s that will open in the U.S. In addition, we will open 20 high returning restaurants in Brazil this year. The balance of the openings will come from our franchise partners.”
Bloomin’ Brands has more than 1,450 restaurants in 46 states, Guam and 13 countries.
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