The parent of Outback Steakhouse provided additional evidence Thursday of a rebound in casual dining, posting the strongest results for its four-chain portfolio since 2013.
All four Bloomin’ Brands concepts generated increases in same-store sales for the fourth quarter of 2017, led by Outback, with a 4.7% year-over-year gain. Outback’s results were driven by a 4.3% rise in transactions, the operator’s highest traffic quarter since 2011, according to Bloomin’ CEO Liz Smith.
Carrabba’s, the second largest operation in Bloomin’s portfolio, posted a 1.3% same-store-sales improvement in comps. Bonefish Grill’s comps inched upward 0.6%, and Fleming’s, the highest-priced of the group, had a 3.1% increase.
The results were the latest in a stream of positive same-store sales aired this week by big names in casual dining, which has been beset by sliding traffic and sales for about two years. Applebee’s, the segment’s leader in both unit counts and systemwide sales, posted a 1.3% comp rise for the fourth quarter, the brand’s first rise in same-store sales since 2015.
Ruth’s Chris, a direct competitor of Fleming’s, enjoyed a Q4 gain of 1.5% on a 0.8% uptick in traffic. Texas Roadhouse continued to outpace the sector with a 5.8% increase for domestic company restaurants and a 4.7% rise for franchised U.S. branches.
Red Robin said a 1.9% upswing in traffic drove a 2.7% rise in Q4 comps, while BJ's Restaurants cited a 0.7% uptick in guest counts as key to its 1.6% comp gain.
Bloomin’ and Applebee’s both indicated that positive trends have continued into 2018.
Not every brand in the segment fared well during the last three months of 2017. The Cheesecake Factory said its Q4 comps slipped 0.9%. However, “Our sales trend started to stabilize during the fourth quarter,” CEO David Overton said in a statement.
Smith attributed the strong gains for her charges to a variety of programs, most of which have been underway for years. The 740-unit Outback in particular “is not a one-legged stool situation,” she commented. Rather, the concept and its sibling brands have benefited from investments in a cross-chain loyalty program, a push for more off-premise business, a renovation of building exteriors, an emphasis on data mining to tailor marketing programs, and a rationalization of menus.
She was particularly enthusiastic about the payback from new off-premise sales initiatives, including the opening of three delivery-and-takeout-only Outback and Carrabba’s Express units. The company is also testing self-delivery at 240 restaurants, Smith revealed.
“The off-premise business has made great progress,” Smith said in a conference call with analysts this morning. “Our research shows this has greater potential than we had initially anticipated,” and could possibly generate 25% of total restaurant sales when fully realized.
Smith spoke the day after a shareholder, Barington Capital, publicly called on Bloomin’ to spin off its secondary brands and focus on Outback.
Smith did not comment on Barington’s demands. She did observe, however, that having “a tightly edited portfolio” has enabled the company to offer one loyalty program across all of its holdings. That, in turn, has generated a 2% increase in sales across the board, in part by encouraging fans of one brand to redeem loyalty-plan credits at a Bloomin’ chain they don’t usually frequent, Smith explained. She noted that the Dine Rewards program now has 5.5 million members.
Overall, Bloomin’s net income for Q4 was $16.4 million, compared with a loss for the year-ago period of $4.3 million. Revenues for the most recent period totaled $1.09 billion, a rise of 8.3%.
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