Upwards of 100 remodels at Bloomin’ Brands are in the works for 2023, plus more tech and marketing investments.
After rolling out handheld technology for servers at Outback Steakhouse restaurants last year, parent company Bloomin’ Brands is now setting its sights on revamping its image. The chain’s No. 1 focus in 2023 is driving sales and traffic by improving execution and consistency, Bloomin’ CEO David Deno told investors during a fourth quarter earnings call. And to do that, Bloomin’ is investing more in technology, introducing new products and sales layers, and remodeling 100 locations, including 50 Outback Steakhouse units.
“We intend to remodel over 100 locations this year at the beginning of a multi-year effort to touch a large percentage of our business,” Deno said. “We know keeping our assets looking at their best, along with our ongoing relocation program, is a key element to growing traffic. All this is about bringing in restaurant traffic back to pre-pandemic levels.”
The Tampa, Florida-based company also operates Bonefish Grill, Carrabba's Italian Grill, Fleming's Prime Steakhouse & Wine Bar, and fast-casual Aussie Grill. The refresh effort will be a holistic one, Deno said, which involves operations, marketing, and new sales layers. Bloomin' paused its remodel efforts during the pandemic and has since "developed a variety of scopes that we can deploy based on varying needs of our restaurants," Deno said.
“You're not expecting a Herculean amount of sales lift when you do an interior remodel. But if you can get a 2 to 3 percent lift, that's a pretty good lift for us,” added Chris Meyer, Bloomin’ EVP and CFO. “If you don't keep your assets current, you could be on a slippery slope from a same-store sales perspective. So I think that keeping the assets current is going to be a critical part of what we do not just this year, but moving forward.”
Bloomin’ Brands reported $1.1 billion in revenue in Q4 of 2022, up 4.6 percent versus 2021, which was largely driven by a $33 million increase in international revenue primarily in Brazil. Though U.S. same-store sales at Bloomin’ Brands rose 1.4 percent in Q4, traffic dropped 7.3 percent in part due to Winter Storm Elliott, which hit in the last week of the fiscal quarter from December 21 to 26. Meyer said the storm had an approximate 1 percent impact on fourth quarter comp sales, but noted “despite the softer sales trends, our traffic was consistently better than the industry in December.”
Additionally, Bloomin’ Brands saw an average check increase of 8.7 percent in Q4 versus 2021, consisting of a 9.5 percent menu price increase and a 0.8 percent decrease in menu mix.
The second priority for Bloomin’ in 2023 is to continue expanding off-premises business, which saw forward momentum last year after implementing a new online ordering system and mobile app, which boosted digital sales. Approximately 76 percent of total U.S. off-premises sales came through digital channels in Q4. In September, Bloomin’ Brands announced it was bringing all of its concepts to the Grubhub Marketplace for pickup or delivery.
In the fourth quarter of 2022 ended December 25, Outback Steakhouse saw a 0.9 percent increase in comparable U.S. restaurant sales compared to 2021, which is up 3.4 percent from 2019.
This year also marks the return of the “No Rules, Just Right” platform at Outback, which initially launched as a 2013 campaign. Bloomin’ is deploying additional marketing dollars to support the relaunch, which aims to highlight the menu and everyday value to guests, as well as reenergize restaurants with new food offerings.
Elsewhere across Bloomin’, Carrabba’s opened a restaurant in Tampa in the third quarter—the Italian chain’s first new unit since 2015—and Deno says they’ve got a “big time wine opportunity at Carrabba’s.” Brunch is returning to Bonefish Grill with “even better food offerings while providing a good financial return for the company,” Deno told investors, adding that more details will be provided as the year progresses.
Fine-dining Fleming’s same-store sales were up 12 percent overall, and Bloomin’ intends to grow Fleming’s from 65 locations to 100 locations in the U.S., and more than double its footprint in Brazil. Fleming’s in Brazil notably saw its second consecutive year of double-digit comp sales growth, up 38 percent in 2022.
In the U.S., Outback Steakhouse had 693 restaurants at the end of 2022, while Carrabba’s ended the year with 218, and Bonefish Grill with 180. Fast-casual Aussie Grills has seven locations in the U.S., and 308 internationally. Overall, Bloomin’ Brands ended 2022 with 1,471 total restaurants in 47 states, Guam, and 13 countries.
Bloomin’ also announced a 71 percent dividend increase and approved a new $125 million share repurchase on Thursday, signaling a strong “confidence in the strength of our free cash flow,” Meyer told investors. “We expect 2023 to mark the second consecutive year where we have returned approximately $150 million to shareholders. Returning cash to shareholders is an important part of our story in 2023 and beyond. Importantly, we're able to increase the dividend, buyback stock, pay down debt and have ample cash available to either invest in our growth initiatives or invest back into our people.”
Related: Outback ranked No. 6 on FSR’s 19 Biggest Public Restaurants in Casual Dining. Carrabba’s came in at No. 12, while Bonefish Grill ranked No. 15.