Bloomin’ Brands, the parent company of Outback Steakhouse, is implementing a turnaround strategy aimed at revitalizing its restaurant operations. As part of this initiative, the company has closed nearly two dozen U.S. restaurants and plans to not renew leases for an additional 22 locations, a move aimed at streamlining its business. The announcement, made on November 6 during the release of the company’s third-quarter financial results, disclosed that the affected locations include Outback Steakhouse, Bonefish Grill, and Carrabba’s Italian Grill.
CEO Mike Spanos highlighted this decision during a conference call, noting that while the closures are significant, each of Bloomin’ Brands’ four restaurant brands posted positive comparable sales growth for the first time since early 2023. “We have great momentum in our business as demonstrated by our third quarter results,” Spanos stated, expressing optimism despite the challenges.
Specifically, Bloomin’ Brands has shut down 21 U.S. restaurants in the three months leading to September 28 and will phase out the additional closures over the next four years. In the past month, several Outback Steakhouse locations in Florida were closed, following 41 locations shuttered across the country in February 2024, which mostly impacted Outback.
The focus of Bloomin’ Brands’ strategy will center on enhancing the Outback Steakhouse brand, which has struggled with traffic compared to competitors. The company is experimenting with various approaches to improve steak quality, simplify menus, and enhance customer experiences. Notably, U.S. restaurant traffic decline slowed to just 0.1% in the latest quarter, and comparable sales increased by 1.2%, signaling potential recovery.
Spanos emphasized the value of “steak excellence,” seeking to return to Outback’s foundational strengths as a steakhouse. The company operates over 1,450 restaurants globally, including 678 Outback Steakhouse locations in the U.S., alongside other brands like Carrabba’s, Bonefish Grill, and Fleming’s Prime Steakhouse & Wine.
In its earnings report, Bloomin’ Brands revealed a revenue increase to $928.8 million, a rise of 2.1% compared to the previous year. However, the company recorded a net loss of $45.9 million, contrasting sharply with the net profit of $6.9 million reported a year ago. The closures incurred an assessment of $33.2 million, alongside anticipated severance and closure charges ranging from $5 million to $7 million in the current quarter.
Going forward, Bloomin’ Brands anticipates U.S. comparable restaurant sales to fall between 0.5% to 1.5% for the fourth quarter, positioning the company to potentially improve its standing in the competitive market. The focus on revitalizing the guest experience and product quality provides a hopeful outlook for Outback Steakhouse’s future.