Bloomin’ Brands Inc.’s four restaurant chains — Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse and Wine Bar — reported sales growth in the fourth quarter, executives said Thursday, with same-store sales at the company’s core domestic concepts rising 4.2 percent.
Company officials were reluctant to declare a victory for casual dining, saying it’s too early to tell whether broad improvement in the long-beleaguered sector in recent months is permanent or just weather related.
“Let’s get past this weather-enabled first quarter,” Bloomin’ Brands CEO Liz Smith said during a call Thursday discussing earnings. “The casual-dining business showed continued momentum in the fourth quarter. But we’re cautious on extrapolating these trends until we see a meaningful increase in consumers’ disposable income, and move past weather comparisons.”
The casual-dining segment has been improving in recent months, and by January the sector’s same-store sales rose 6.7 percent, according to the MillerPulse survey, outpacing quick-service sales for the first time in four years. Better weather this winter is considered a major reason for the improvement.
Each of Bloomin’ Brands’ concepts improved late last year, led by Outback Steakhouse, whose same-store sales rose 6.4 percent. Much of the increase was due to customers ordering more expensive menu items. The chain has been advertising its steak items more heavily, and consumers are ordering those items more frequently. Traffic rose 1.3 percent in the fourth quarter.
Same-store sales at 243-unit Carrabba’s Italian Grill rose a modest 0.3 percent, the first time in a year that its sales grew. Traffic was rose 1 percent, an indication that Carrabba’s has concentrated efforts on lighter limited-time offers and lower-cost items that get customers in the door.
Smith noted that Italian restaurant sales fell 3 percent in 2014, based on data from Chicago-based market research firm The NPD Group, noting that the sector has to work to get more everyday customers in the door. “Italian needs to reinvent itself in the U.S. away from the special occasion/indulgence, to more variety and lighter options,” she said. “We’re expanding our menu to bring in the lighter user.”
Same-store sales at 66-unit Fleming’s Prime Steakhouse and Wine Bar rose 3.4 percent in the quarter, while 206-unit Bonefish Grill reported same-store sales growth of 0.7 percent.
Bloomin’ Brands plans to expand lunch at Outback. Lunch is currently served at 61 percent of Outback’s 975 domestic locations. The company wants to increase that percentage to 70 percent by the second quarter of 2015, when it will begin supporting that effort with a national ad campaign.
“We are excited about getting to the 70 percent level and turning on national advertising,” Smith said, noting that lunch is drawing business at existing locations without the benefit of advertising. “We think that’s going to be very, very well received, and should accelerate sales at lunchtime.”
Stronger sales at Bloomin’ Brands led to a 5.5-percent increase in revenue for the quarter, to $1.1 billion. For the year, revenue increased 7.6 percent, to $4.4 billion.
Net income fell 62 percent in the quarter, to $22.4 million, from $59 million a year ago, due largely to expenses related to a company reorganization and the closure of 66 international locations. For the year, net income fell 56 percent, to $91.1 million, from $208.4 million in 2013.
On an adjusted basis, net income fell 1.1 percent for the year, to $140.8 million, or 71 cents per share, from $142.4 million, or $1.63 per share.
Contact Jonathan Maze at [email protected].
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