On the overall development front, Outback is building a pipeline to add an additional 50 restaurants.
Returning to the discounting topic, Smith said the 19 percent collective decrease did impact traffic, particularly at the smaller Bonefish and Fleming’s brands. However, it also had a positive impact on profitability. The two chains, with 200 and 70 units, respectively (Outback has 738 and Carrabba’s 227), are on track to achieve record profits in 2018, Smith said.
The soft-discounting strategy, in some ways, resulted in average-check, per person, increases across the board (3.4 percent at Outback, 5.2 percent at Carrabba’s, 2.7 percent at Bonefish, and 8 percent at Fleming’s).
David Deno, chief financial officer, said it’s also, “part of our overall strategy to provide value for the customer, but at the same time drop our reliance on specific LTOs and coupons.”
“As the second half of the year unfolds, we will continue to wean promotional traffic from the base and replace it with more-sticky, high-value consumers,” Smith added. “We are confident this is the correct strategy to continue to build healthy traffic and grow margins.”
Same-store sales fell 0.6 percent at Carrabba’s in Q2, year-over-year, while Bonefish saw a 1.5 percent rise, and Fleming’s comps climbed 0.3 percent.
Bloomin’ is in the process of making changes across the portfolio. Carrabba’s doubled the available dollars for partners to engage in local marketing in their communities as the brand shifts marketing spend away from national TV and limited-time offers. Bonefish continued to push operators toward sourcing fresh fish specials on the local level, and moved marketing resources from national toward local programs, helping “define Bonefish as the unchain-chain, and is paying off in sales and profitability,” Smith said.
Fleming’s rolled out a new, simplified menu to improve consistency and execution and work on differentiating the brand from a traditional, high-end steakhouse to a localized menu selection and customer segmentation, Smith added.
Overall, Bloomin’s earnings per share of 38 cents beat Zacks Consensus Estimates of 30 cents. The company has beat Wall Street expectations three of the last four quarters on the metric, and posted revenues of $1.03 billion in Q2.