Outback Steakhouse is getting back to the basics.
Parent company Bloomin’ Brands on Thursday announced a $75 million turnaround plan aimed at returning Outback to its roots as an approachable, affordable source of high-quality steaks.
The investment will fund improvements to the chain’s steak quality and preparation, service, staffing and marketing, as well as restaurant remodels and renovations. The plan also calls for finding $30 million in savings next year by optimizing Outback's supply chain and restaurant operations.
It also entailed the closure of 21 restaurants last month across Bloomin’s portfolio and the decision to not renew the leases of 22 other locations. This follows the closures of about 40 restaurants earlier this year.
Bloomin’ will make the turnaround investments over the next three years, with the bulk of them—about $50 million—coming in 2026. It is suspending its dividend for investors to help fund the investment.
Of the $50 million planned for next year, about half is earmarked for improving steak and redesigning the menu; $7 million for service and customer experience; and $8 million for labor, particularly higher wages for managers. The remaining $10 million will go toward marketing.
The new plan comes after years of same-store sales and traffic declines at 670-unit Outback. The struggles have led to a series of leadership changes at Bloomin’ beginning last August with the hiring of new CEO Mike Spanos, a former Delta Air Lines executive.
Under Spanos, Bloomin’ has already made several strategic changes largely focused on Outback. It has trimmed down its menu and added value-priced options to appeal to inflation-weary consumers. It has also been testing other food and service updates at a small group of restaurants.
The plan unveiled Thursday formalizes many of these strategies and puts a price tag on them for the first time. It will aim to do four things at Outback: Deliver a remarkable dine-in experience; drive brand relevancy; reignite a culture of ownership and fun; and invest in the restaurants.
In general, the goal is to return the brand to its roots as a fun, casual steakhouse with a unique Australian theme.
"Fundamentally, we are going back to the core greatness of the Outback brand," Spanos told analysts Thursday. "Outback led to craveable food, value, and an emotional connection with the server and managing partner. However, the key differentiator was the fun, casual, and adventuresome Australian spirit."
It will all start with the chain’s signature product. Outback will invest in better-quality steak and cuts and will expand its grilling capacity with new equipment. It will also step up training for staff to make sure they’re cooking steaks consistently.
The improved steaks will be supported by new marketing highlighting the “thickness, freshness, and craftsmanship of every cut along with our signature Outback seasoning,” Spanos said. In tests, the steaks translated to a 10-point lift in customer satisfaction.
Customer service and atmosphere will also be a big area of focus. After a six-table-per-server model proved too burdensome for staff, Outback is going to a 4:1 ratio that has shown positive results in tests. And it will invest in freshening up its restaurants both inside and out, with plans to touch nearly every Outback by the end of 2028. That effort will start at the beginning of next year and is expected to cost an average of $400,000 per unit.
Ultimately, Bloomin’ believes there is considerable demand for affordable, high-quality steaks in a full-service atmosphere.
“We're getting a lot of guest feedback that guests know they can come into Outback, get a perfectly cooked steak at a great value, get a couple sides, get a great experience … but yet it's almost the same cost as what they're paying for beef at retail,” Spanos said. “And what that tells me is Americans want to get out. They're going to prioritize getting out of the house into casual dining over other discretionary spending.”
That thesis proved true at Outback in the third quarter, when same-store sales increased a surprising 0.5%, its first positive result in over two years. Executives credited the $14.99 Aussie 3-Course Meal for satisfying customers’ demand for value.
“I just think we're meeting the consumer where they're at,” Spanos said. “We're creating the right variety of affordable entry price points, value, and for example, that's been the Aussie 3-Course.”
Same-store sales rose at each of Bloomin’s other concepts—Carrabba's, Bonefish Grill and Fleming's—all of which have added some type of value offering to their menus. However, traffic was still down about 0.1% companywide.
The sales growth has carried into the current quarter, prompting Bloomin’ to upgrade its expectations for same-store sales for the full year. It’s now expecting them to be flat to positive 0.5%, up from flat to negative 1%.
The bottom line was a different story, however, as restaurant-level margins declined nearly 2% year over year, to 9.2%. That was due to higher costs for food, labor, supplies and insurance.
Bloomin’ stock was down nearly 10% as of mid-day Thursday.
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