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Financing

New menu helps Outback reclaim 93% of year-ago sales

Parent company Bloomin' Brands also revealed that it plans to expand the steakhouse's fast-casual spinoff, Aussie Grill.
Photograph: Shutterstock

The rollout of a lower-priced menu helped Outback Steakhouse lift sales at established units to within 7% of year-ago levels last month, according to the chain’s parent, casual-dining giant Bloomin’ Brands.

Bloomin’ also revealed in posting its third-quarter financial results that domestic restaurants across all its brands—some 1,187 outlets—are holding onto 50% of their incremental off-premise business as dining-room capacities are raised. Like many casual-dining operators, the company saw takeout and delivery business soar as onsite service was suspended or limited to outdoor dining early in the pandemic. Many have been wondering how that volume might change as indoor seating is restored.

“Carrabba's is especially seeing a lot of success,” said Bloomin’ CEO Dave Deno, referring to the company’s casual Italian chain. “We believe delivery and carryout will be an important growth catalyst for Carrabba's moving forward.”

He also told financial analysts during the company’s Q3 conference call that Aussie Grill by Outback, a fast-casual riff on Bloomin’s biggest brand by far, will figure into the company’s expansion strategy next year. The spin-off was conceived as a way of accelerating international expansion because its smaller size makes it easier and less expensive to develop. “After we saw our success internationally, we quickly brought this brand to the U.S.,” Deno said.

Bloomin’ has another potential growth vehicle in Tender Shack, a virtual concept specializing in chicken fingers, fries and cookies. The food is prepared in one of the company’s conventional restaurants for delivery by a third-party service. Bloomin’ recently expanded a venture’s test from a single market in Florida to multiple locations in Texas, Oklahoma, Missouri and Kansas.

“The chicken segment is a large and rapidly growing category,” said Deno. “We have the assets and talent to take advantage of the significant opportunities. We have the assets and talent to take advantage of the significant opportunities.”

Other executives revealed that Bloomin’ has significantly lowered its food costs through a drive to cut waste. “Even with the introduction of the new Outback menu, we continue to see waste favorable to pre COVID levels,” said CFO Chris Meyer.

The new bill of fare was intended to spotlight Outback’s steaks while accommodating patrons hunger for value. Featured listings include premium steak cuts and larger servings, with prices rolled back on some items. For instance, the chain’s signature Bloomin’ Onion appetizer is priced $2 lower than it was on the prior bill of fare. It was introduced last month. 

“The menu is performing even better than what we saw in test,” said Deno. “We are seeing strong customer feedback on value and guests are trading up to larger and better cuts of steak. Our attachment rate on appetizers is growing and alcohol mix is improving as well. All of this helps grow sales and profitability while improving guest satisfaction.”

Outback posted a same-store sales decline of 10.4% for Q3, with the slide narrowed to 7% at the end of September. Carrabba’s Q3 comps were pegged at -9%.

The two other developed brands in Bloomin’s portfolio, Bonefish Grill and Fleming’s Prime Steaks and Wine Bar, posted comps of 22.5% and 20.3%, respectively. 

Bloomin’ lost $17.8 million for the quarter, compared with a year-ago net profit of $9.4 million. Revenues slipped 20.3%, to 771.3 million.

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