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Outback’s promotions fail to generate expected sales

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Domestic comp sales at Outback Steakhouse were flat during the third quarter, growing 0.1 percent, the result of campaigns that failed to drive anticipated sales and overall weakness in the casual-dining segment, parent company Bloomin’ Brands said.

“Our marketing programs did not break through as expected,” Bloomin’ Brands CEO Liz Smith said on an earnings call Tuesday, noting that the Q3 return of a steak and unlimited shrimp promotion did not drive traffic as planned.

In addition, a 3 percent decline in dinner traffic within the casual-dining segment played a role in flattening sales, she said, referencing NPD Crest data. That decline grew to 6 percent for weekend dinner traffic, she added, which had a notable impact on Outback, as it “remains primarily a dinner business that skews more towards the weekend.”

In an effort to revive flattening sales, Bloomin’ Brands said it will focus on enhancing marketing efforts and undertake an “aggressive” exterior remodel at restaurants across the Outback chain, in addition to making several technology upgrades.

“Although we're not satisfied with our comp sales results in Q3, Outback is on track to deliver positive comp sales for the sixth consecutive year,” Smith said. “This is a strong brand with strong consumer appeal and, given our many levels, we are confident that it will continue to grow in 2016.

U.S. comps at Outback’s sister brands also saw declines during Q3—falling 2 percent year over year at Carabba’s, 6.1 percent at Bonefish Grill and 0.6 percent at Fleming’s.

Bloomin’ Brands reported total revenues of $1.1 billion for the quarter. 

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