TAMPA Fla. Outback Steakhouse parent OSI Restaurant Partners LLC posted a third quarter of negative same-store sales and widening losses that it blamed on today’s harsh economic conditions.
“The recent disruptions in the financial markets, including the subprime mortgage crisis and the bankruptcy or restructuring of certain financial institutions, pose challenges to our business as consumer confidence and spending, availability of credit, interest rates, foreign currency exchanges rates and other items are adversely impacted,” the company said in its quarterly filing with the U.S. Securities and Exchange Commission.
The privately held OSI, which is owned by private-equity firms Bain Capital and Catterton Partners and certain Outback Steakhouse founders and management, reports quarterly results because of its publicly traded debt.
For the quarter ended Sept. 30, OSI posted a net loss of $46.6 million, nearly triple the year-ago loss of $16.7 million. In the latest quarter, the company booked $15.3 million in charges for restaurant closures and asset impairment.
Revenues for the latest quarter fell 5.8 percent to $948.5 million. Systemwide same-store sales fell 7.8 percent at Outback Steakhouse, 5.7 percent at Carrabba’s Italian Grill, 10.2 percent at Bonefish Grill and 9.7 percent at Fleming’s Prime Steakhouse & Wine Bar. The declines occurred despite menu price increases of between 1.6 percent and 4.1 percent among the various chains.
Outback Steakhouse’s average weekly restaurant volume fell 7.7 percent from year-ago levels to $56,782.
OSI continued to expand its systemwide units, mainly through the openings of Bonefish Grill and Fleming’s Prime restaurants. At the end of the third quarter, there were 979 Outback Steakhouse restaurants worldwide; 237 Carrabba’s Italian Grills; 152 Bonefish Grills, up from 138 units a year ago; and 58 Fleming’s locations, up from 52 locations. OSI also operates 73 additional restaurants under the Roy’s, Cheeseburger in Paradise, Lee Roy Selmon’s and Blue Coral Seafood and Spirits, all of which the company expects to sell in the long term, although it did not provide a timeline. The company did say it is currently marketing for sale the Cheeseburger in Paradise concept.
