Bloomin’ Brands Reveals 4 Key Priorities
In an Q1 ’22 earnings call with analysts, CEO David Deno laid out Bloomin' Brands' four key priorities:
One: Grow in-restaurant sales by improving service levels and food offerings. Building upon the enhancements that have been made over the past two years, “We continue to look for ways to simplify the business to improve execution and consistency. This is rolling out several innovations such as new cooking technology, including advanced grills and ovens to improve food quality and productivity." For meal pacing, kitchen display systems are being rolled out now, and handheld technology for servers will be introduced in Q3. "These innovations should reduce costs and further improve customer service,” he added.
Two: Off-Premises Business. “We capitalized on our strong carryout and delivery capabilities during the pandemic. U.S. off-premises sales were over $1 billion in fiscal 2021. Retention levels held steady with Q4 and are contributing to sales outperformance,” Deno said. “We expect off-premises to remain a large and growing part of the business going forward.”
Three: Leverage operating margin gains by growing sales and reducing costs. There will be reduced reliance on discounting and promotional LTOs and “pivoted advertising spend toward more targeted higher return digital channels,” Deno explained. Bloomin’ is “aggressively pursuing efficiencies in food, labor and overhead.”
Outback Steakhouse Rolls Out Updated Mobile App
Four: Become an even more digitally savvy company. In Q1, approximately 79% of total U.S. off-premises sales were through digital channels. “Last year, we implemented a new online ordering system and mobile app to support our digital business. These technology initiatives are aimed at creating a frictionless customer experience while also enhancing customer engagement. Both have outperformed expectations, and the new app has over 1.8 million downloads. You can expect to see more activity as we improve the functionality and features of our app and digital offerings,” Deno said. “These priorities will be our guide for 2022 and beyond.”
A New Look for Outback Steakhouse
Bloomin' is among the brands looking to maximize earnings per square foot with a smaller prototype.
As demand for off-premises dining has surged, the company has been designing a Outback Steahouse prototype that is 16% smaller, or about 5,000 square feet, and about 20% less expensive to build, explained Mark Graff, Group VP of IR, on the earnings call with analysts.
Inside the new prototype, guests will notice “a brighter ambience,” a redesigned bar and décor that highlights the Outback’s Aussie heritage. “Second, the new prototype integrates the new back- and front- of-house technology enhancements,” Graff said. “This improves speed, consistency and execution while strengthening the personal guest experience.” Lessons learned from the smaller prototypes will be applied to Outback’s sister brands, including Carrabba’s and Bonefish Grill, he added.
Six new Outbacks are scheduled to open this year, and 23 additional sites are under contract. Currently there are 692 Outback Steakhouse locations open in the US.
The company will continue to innovate with its non-traditional formats as well, Graff added, including its Aussie Grill, a fast-casual concept and virtual brand inspired by Outback Steakhouse that debuted in 2019, its Tender Shack virtual chicken brand, virtual kitchens, and airport locations.
Q1 ’22 Earnings
For Q1 '22, total revenues were $1.14 billion, up 15.5% from 2021, driven by a 14% increase in U.S. comparable restaurant sales. Same-store sales results consisted of a 5.6% increase in pricing, a 6.9% increase in mix, and a 1.5% increase in traffic. Off-premises was 35% of U.S. revenues in Q1 of 2021 and was 26% of U.S. revenues in Q1 of this year.
“This shift in revenue channel also helped drive menu mix higher year over year. At 26% of U.S. revenues, off-premises was flat from where it was in Q4,” explained Chris Meyer, Executive Vice President and Chief Financial Officer. “The highly incremental third-party delivery business continues to grow and was 12% of U.S. revenues in Q1 versus 11% in Q4.
Off premises was 29% of Outback’s sales, and 35% of Carrabba's. “Off-premises remains sticky, is a large part of our ongoing success, and will remain a key part of our growth strategy moving forward,” Meyer said. "Although we remain well below 2019 spending levels, we are reinvesting some marketing into higher ROI vehicles to both build awareness and drive frequency."
Bloomin' Brands include Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse & Wine Bar, and Aussie Grill by Outback. It operates more than 1,450 restaurants worldwide.