Outback Steakhouse reported its first quarter of positive traffic since the fourth quarter of 2021, thanks in large part to consumer demand for value meals.
Traffic in the quarter ended on Dec. 28 rose 0.9% year over year, though same-store sales declined 0.6% as more customers opted for an Aussie 3-Course meal, which starts at $14.99.
The low-priced meals are one piece of a broad turnaround effort at the steakhouse chain that is focused on improving its value proposition, food quality, operations and ambiance after years of sales and traffic declines. Parent company Bloomin’ Brands will invest $50 million in those efforts this year.
Early steps have been focused on value and Outback’s biggest menu category, steak. In November, the chain rolled out a new lineup of steaks including a bone-in ribeye and a Delmonico Ribeye. And to improve steak quality and consistency, Outback is now requiring field leaders to pass a certification test so that they can better train restaurant staff on how to cook its steaks.
Bloomin’ said it’s encouraged by the early results of those efforts, noting both the better traffic as well as improvements in customer scores on food, service, value, atmosphere and the brand itself.
Looking ahead, Outback will continue to focus on value as a traffic driver. Investments in value pricing will keep its check averages about 2 points lower this year.
“We have some really strong traffic, and it was definitely punched up during the holiday periods. And so, we know we got to turn the dial a bit on this,” CEO Mike Spanos said during an earnings call on Wednesday.
The base Aussie 3-Course meal comes with a soup or salad, entree and side, and a slice of cheesecake. In an encouraging sign, Spanos said that most customers who order it opt into higher price tiers. About 60% end up paying $17.99 or $20.99 for a more premium entree, and about 10% upgrade to a different dessert.
Spanos added that the Aussie 3-course has gotten existing customers to visit more often while also luring in new customers.
Value meals, once limited largely to quick-service chains, have become common across the restaurant industry over the past year as brands look to appeal to customers who are spending less due to inflation.
In the second half of the year, Outback will start putting more marketing behind its turnaround efforts, with an extra $10 million in marketing dollars budgeted for 2026. Notably, it is changing its marketing strategy to focus more on digital channels rather than TV. Digital will make up 60% of its marketing spending this year compared to 33% in 2025.
That said, Bloomin’ is keeping its expectations for the year fairly modest. It’s forecasting companywide same-store sales growth of 0.5% to 2.5%. That includes Outback, Bloomin’s largest brand, as well as Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse.
That forecast factors in the effects of bad winter weather to start the year. So far, weather has had a negative 2.2% impact on Bloomin’s restaurants, and the company is expecting same-store sales growth of flat to 1% for the current quarter.
The company’s investments at Outback as well as higher food and labor costs had a negative impact on profits in the quarter. Restaurant-level margins declined by nearly 1 point, to 11.5%, and the company expects them to remain in that range in 2026.
Bloomin' is forecasting commodity inflation of 4.5% to 5.5% for 2026 driven mostly by beef inflation in the high-single digits. Labor inflation will be similar to 2025, up 3% to 3.5%.
Sales and traffic results at Bloomin’s non-Outback brands in the fourth quarter were as follows:
Carrabba’s: Same-store sales up 1.6%, traffic down 0.9%
Bonefish Grill: Same-store sales down 0.1%, traffic up 2.3%
Fleming’s: Same-store sales up 0.1%, traffic down 2.4%
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