After Barington Capital Group representing a group of shareholders released a letter to Bloomin’ Brands, Inc. chairman and CEO Liz Smith on Feb. 21, calling for sweeping changes in the company’s brand and leadership structure, as well as marketing and financial strategy, many were anticipating the earnings report released the following day to be poor.
However, with comparable restaurant sales up 1.8 percent at U.S. Outback Steakhouse locations for the 2017 fiscal year and up 4.7 percent in the fourth quarter, Bloomin’ Brands actually isn’t doing too bad.
“By all measures the fourth quarter was an excellent finish to 2017 for Bloomin' Brands,” Smith said in the earnings summary released Thursday morning. "Outback's Q4 sales and traffic performance were well ahead of the industry, and reflect the ongoing impact of our investments in the customer experience. We are pleased with how our brands are performing so far in early 2018, particularly at Outback where momentum continues."
Currently, Bloomin’ operates approximately 1,500 restaurants in 48 states, Puerto Rico, Guam and 19 countries, some of which are franchise locations. In 2017, the company opened 31 new restaurants, 23 of which in international markets. Seven of these restaurants were opened in the fourth quarter.
Traffic at Outback was positive, too, up 1.3 percent over the year and 4.3 percent in the fourth quarter.
Looking forward to 2018, Bloomin’ is hopeful this success will continue, particularly with its Outback brand. “This further validates our strategy that the investments we are making to elevate the core experience are paying off,” Smith said. Eighteen months ago, the company began pivoting away from what she described as louder marketing techniques to investing more in the customer experience and digital research to more effectively and personally target consumers.
“These investments were prioritized toward customer facing improvements including food quality and portion enhancement, service upgrades, and improved ambiance,” Smith said. “In addition to investing in the customer experience, we are focused on building incremental sales layers to accelerate the sales momentum over the medium and long-term. These include data personalization capabilities, the Dine Rewards loyalty program, and the rapidly growing off premise business.”
Dine Rewards now has over 5.5 million members, and the company hopes to continue to leverage this platform with the recent hiring of SVP of digital marketing, analytics and CRM, Ramin Eivaz. Bloomin’ hopes, under Eivas’ guidance, the brand will determine how to best optimize its data and efficiently engage with consumers in a personalized marketing strategy.
On trend with other large brands, Bloomin’ looks to reinvest in its employees as well, in anticipation of major tax savings. “We intend to reinvest approximately 50 percent of our tax savings back to our employees,” said David Deno, EVP and chief financial and administrative officer. “These reinvestments will come in the form of additional field compensation, enhancements to our health benefits, a larger 401 K match, as well as leadership development training.”
All in all, 2017 earnings leaves Bloomin’ optimistic for 2018. “2017 was a strong year for our company and has set us up for success in 2018,” Deno said.