Outback Steakhouse is shaking things up.
The 673-unit casual-dining chain on Wednesday unveiled a wholesale turnaround plan that includes a smaller menu, a different marketing strategy and a renewed focus on operations at its restaurants.
Outback also plans to dramatically slow new unit openings next year and shift to renovating many of its existing locations instead.
It comes after several years of sluggish sales and traffic at the chain. In the fourth quarter of 2024, same-store sales declined 1.8%. It was the chain’s fifth straight quarter of negative same-store sales.
Executives blamed a "choppy" environment beset by bad weather, geopolitical issues and calendar shifts that have continued into the current period. They also called out "choosy" consumers who are ordering fewer appetizers, drinks and desserts.
Shares in Outback parent company Bloomin' Brands plunged more than 17% on Wednesday.
The Tampa, Florida-based company has been in transition for over a year. In 2023, the challenges at Outback prompted activist investor Starboard Value to begin pressuring Bloomin’ to turn things around. Since then, Bloomin’ has made several leadership changes, most notably hiring former Delta Air Lines COO Mike Spanos to replace CEO Dave Deno, who retired late last year.
Now it is entering full-blown turnaround mode under Spanos. His plan encompasses the entire company, which includes Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse.
Like Outback, they have struggled recently: Bloomin’s total U.S. same-store sales fell 1.1% last quarter, and they are expected to range from negative 2% to flat for the current year.
But Outback, the company’s largest and most important brand, will be a particular area of focus.
“We have iconic brands that have a strong right to succeed in on-trend large-scale categories,” Spanos said during an earnings call Wednesday. “However, the reality is that we are currently not succeeding.”
Here’s how Bloomin’ plans to right the ship.
‘Simplify the agenda’
The company, which owns or franchises more than 1,450 restaurants worldwide, has become too complicated, Spanos said, both at the corporate and restaurant levels.
It has already taken some steps to simplify things. In December, it sold two-thirds of its operations in Brazil and has the option to sell the rest in 2028. And last week, it laid off about 17% of its home-office staff in an effort to become more efficient.
The layoffs reduced the number of management layers in the business and will enable a more brand-centric approach, Spanos said. Departments that were previously centralized, like marketing, training, culinary and off-premise, will now be housed within each brand.
The simplification process will also extend to Bloomin’s restaurants. It plans to cut all of its menus by 10% to 20% this year, including nearly 20% at Outback. Unpopular or complicated items will be the first to go.
“We need to make fewer items, but make those much better,” Spanos said.
Bloomin’ will also shift away from the discounted limited-time offers that it typically runs every 10 to 12 weeks. Instead, it will focus on making “abundant value” part of the permanent menu. Its first installment on that front is a $14.99 three-course meal at Outback, which was the chain’s most successful promotion of 2024. It’s testing similar options at Carrabba’s and Bonefish.
Better food and marketing
Bloomin’ wants to do a better job satisfying its customers, starting with the menu. It is reassessing customer ratings on all of its items and will either improve or eliminate dishes that are below average. Items that don’t travel well for takeout will also be slashed.
It’s also reevaluating its cooking processes and retraining staff where necessary to improve consistency. And it’s working with suppliers to enhance product quality.
Bloomin’ will be able to keep close tabs on customers’ reactions to these changes thanks to new tabletop tablets from Ziosk, which allow restaurants to survey customers at the end of the meal. Customers can also use them to pay their bill. The tablets will be in place systemwide by the end of April.
Bloomin’ is also making a big change to its marketing strategy. At Outback, for instance, the promo calendar has typically centered on large, limited-time campaigns like Steakmas. But those create complexity for operators and have drawn attention away from the chain’s core menu.
“We are shifting our approach to provide clear messaging that highlights craveable food, abundant everyday value and irreverent fun,” Spanos said.
He pointed again to the success of Outback’s three-course meal, which allows customers to choose from a soup or salad, a choice of entree and a dessert.
Revamp at Outback
While the above strategies will apply to all of Bloomin’s concepts, the company has more detailed plans for Outback, which Spanos said will be his main focus.
The company has stripped the brand down to brass tacks, testing a variety of changes at an "incubation" restaurant last year. It will test the updated operating model to 14 additional restaurants by the end of this month.
Spanos provided little in the way of specifics but said the lab has shown promising results and that the company will share more details in the coming quarters.
In another major change, Outback plans to slow down its new unit openings next year. The chain will open about 18 to 20 new restaurants in the U.S. this year, CFO Michael Healy said, but will open far fewer in 2026. Spanos said Outback needed to "earn the right" to open new restaurants again.
Instead, it will focus on upgrading the restaurants it already has. It’s currently evaluating the state of each Outback to determine which ones need to be remodeled. The company expects about 50% of its locations to be remodeled and is budgeting about $40 million for that project in 2026.
The hope is that the refreshed restaurants will see better traffic. That project will begin in the second half of this year.
Lastly, the company wants to get back to an operational mindset at Outback. To that end, it recently promoted Pat Hafner to president of the brand. Hafner has spent 29 years at Outback, where he began as a cook and worked his way up. He was previously president of Carrabba’s.
Overall, Spanos said the biggest area of opportunity at Outback is more consistent execution across food, value and customer experience.
“What I care about is when that guest leaves the restaurant, I want them to be excited to return and have a strong intent to return and drive frequency of visitation,” Spanos said.
"Outback is a great business," he said. "It is a very fixable business."
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