Bloomin' Brands, Inc. reported financial results for the 13 weeks ended June 29, 2014.
Total revenues increased 9 percent to $1.1 billion, while comparable sales for company-owned core domestic concepts increased 0.6 percent and traffic was flat. The company plans to expand Carrabba's Italian Grill in Brazil with first opening in the first half of 2015, and system-wide development was six new restaurants including three Brazilian Outback Steakhouse locations.
Restaurant-level operating margin was 16.1 percent versus 16 percent for the second quarter of 2013.
"Dinner traffic did not recover as expected following the weather events of the first quarter," says Elizabeth Smith, CEO. "We have responded with marketing innovation in the second half that is focused on dinner. In addition, in Korea, we continue to face significant macro issues and an increasingly competitive environment. Given these challenges, our second quarter results were softer than expected and we have revised our 2014 total year outlook down from our original estimates."
Smith continued, "While 2014 is challenging, we remain confident in our long term growth prospects and our portfolio's unique opportunities. We are excited to announce our plans to expand Carrabba's to Brazil with our first opening expected in the first half of 2015. This represents the next step in our International expansion efforts. We will continue to pursue International opportunities for Outback, particularly in high growth areas such as Brazil and China."
Financial Results
The following summarizes the Company's results for the thirteen weeks ended June 29, 2014:
Total revenues increased 9 percent to $1.1 billion. This increase was primarily due to the consolidation of restaurant sales generated by the formerly unconsolidated joint venture restaurants in Brazil, additional revenues from opening new restaurants and an increase in domestic comparable restaurant sales at our existing restaurants. The increase in restaurant sales was partially offset by the closing of 29 restaurants since March 31, 2013 and a decline in comparable sales in the Company's South Korean restaurants.
Comparable sales for Company-owned core domestic concepts grew 0.6 percent. Traffic for company-owned core domestic concepts was flat as traffic increases from lunch expansion were offset by traffic declines in the dinner business. Domestic comparable restaurant sales at Outback grew 0.9 percent; at Carrabba's, decreased 1.2 percent; at Bonefish Grill, grew 0.3 percent; and at Fleming's Prime Steakhouse and Wine Bar, grew 3.6 percent.
Restaurant-level operating margin was 16.1 percent for the thirteen weeks ended June 29, 2014, versus 16 percent for the second quarter of 2013. This increase was primarily due to productivity savings, menu pricing, and the operating margin benefit from the consolidation of the formerly unconsolidated joint venture restaurants in Brazil.
The increase was partially offset by commodity inflation, costs associated with lunch expansion and new promotions, lower average unit volumes in the company's South Korean restaurants, and increases in certain other operating expenses.
The Company opened six new system-wide locations: one Bonefish Grill restaurant, one Outback Steakhouse, and four company-owned international Outback Steakhouse restaurants, three in Brazil and one in South Korea. There were also four closures: three international Outback Steakhouse restaurants in South Korea and one domestic Outback Steakhouse location.
