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What cost pressures? Outback's parent sees significant Q2 margin growth

Bloomin' Brands posted an average rise in restaurant-level operating profits of five percentage points.
Photograph: Shutterstock

The parent of Outback Steakhouse successfully resisted the margin pressures that pinched many of its casual-dining competitors during the second quarter, with restaurant-level profits shooting past 2019 levels by more than five percentage points.

Bloomin’ Brands also reported strong topline growth for Q2, followed by an acceleration in sales during July. Same-store sales for all four of its full-service brands shot past the levels of two years ago during the first month of the third quarter by double digits.

The upswing was particularly dramatic for Bloomin’s priciest brand, Fleming’s Prime Steakhouse & Wine Bar, with a 37.5% jump in comps. Carrabba’s Italian Grill generated a 23.3% increase, Bonefish Grill posted a 12.3% gain, and Outback, the company’s main business, logged an 11.2% rise.

All but Bonefish also saw double-digit increases over 2019 sales in Q2. Bonefish surpassed its mark of two years ago by 4.2%.

Like a number of other casual-restaurant operators, Bloomin’ reported that its brands managed to hold onto strong takeout and delivery sales as the restaurants saw an upswing in dine-in business. The company attributed the surge in both sales channels to pent-up demand and federal stimulus dollars.

Bloomin’ revealed that operating margins increased across its portfolio during Q2 to an average of 20.3%, compared with the comparable 2019 figure of 15%.

However, it revised its food-cost projections for the remainder of 2021. It now expects commodity inflation of 1% instead of remaining flat.

Its projection for the rise in labor costs remained at 3% to 3.5%.

“We are making great progress improving margins, increasing cash flow and retaining off-premises sales as dining rooms have reopened,” CEO Dave Deno said in a statement.

Bloomin’ posted a net income for Q2 of $84.9 million, compared with a year ago loss of $92.4 million. Revenues totaled $1.08 billion, or more than double the pandemic-dampened intake of a year ago.

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