Focus on ops yields a strong quarter for Outback’s parent

Bloomin’ Brands cited a $50 million investment in kitchen and service enhancements as a key factor behind the positive Q1 comps for all four of its brands.
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A $50 million investment in kitchen and front-of-house operations helped drive increases in same-store sales for all four of Bloomin’ Brands’ casual-dining brands in the first quarter, management informed investors this morning.

The parent of Outback Steakhouse said it intends to sustain the momentum by developing a new interior design for Outback, relocating some stores to preferable locations where possible and continuing to build delivery sales. 

Delivery is now available from 550 Outback and Carrabba’s Italian Grill restaurants, all of which rely on Bloomin’s own drivers and technology rather than a third-party service such as DoorDash or Uber Eats. “This business is profitable,” Dave Deno said in his first analyst call since succeeding Liz Smith as Bloomin’ CEO.

Among the specific off-premise opportunities cited were building Carrabba’s catering sales.

To boost dine-in business, Outback is currently testing a variety of new interior designs, Deno said. “We are also relocating Outback restaurants as quickly as sites become available,” he said.

Outback led its sister concepts in same-store sales growth during Q1, with an increase of 3.5%. Bonefish Grill, a concept that had been lagging, posted a comp rise of 1.9%, and Carrabba’s and Fleming’s Prime Steakhouse & Wine Bar generated increases of 0.3% and 0.6%, respectively.

The key drivers, executives repeatedly mentioned, were changes undertaken in recent years to provide a better experience for guests. About $30 million was invested in simplifying kitchen operations, upgrading food quality and right-sizing portion sizes, Deno said.

Another $20 million was spent on improving service through enhanced training, he added. Better service should be a differentiator in particular for Outback, Deno asserted.

Domestic units were outstripped in same-store sales growth by Bloomin’s Brazilian operations, a holding that formerly had been a significant drag on profits. Stores there generated an average same-store sales increase of 3.7%.

Overall, Bloomin’s revenues rose 1%, to $1.13 billion. Net income slipped 1.7% to $64.3 million. The company noted that it had changed its method for accounting for leases.

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