Buoyed by an August IPO and a strong quarter, Bloomin' Brands is ready to blossom.
On Wednesday, a month after Tampa's parent company of Outback Steakhouse and other chains went from privately held to publicly traded, CEO Liz Smith outlined an aggressive strategy to grow and squeeze stronger earnings out of its casual dining empire.
The plan is to expand its Carrabba's Italian Grill and Bonefish Grill brands and push more of its chains to open at lunch and for weekend brunch with freshened menus, often with lighter fare. Smith also sees adding more locations in such established overseas markets as South Korea and Brazil, and pushing into potentially blockbuster countries such as China and Mexico.
That may sound overly ambitious in a still weak economy. This same week, the larger $8 billion Darden Restaurants, Orlando parent of Red Lobster, Olive Garden, Seasons 52 and several other well known chains, faces Wall Street heat for trying to do too much, too fast.
And for all its full-speed-ahead goals, Bloomin' Brands is far from invulnerable. August's initial public offering only raised half the amount of what it wanted.
But Bloomin' Brands, as OSI Restaurant Partners is now called, is riding high on a two-year rebound and this week's booming second quarter results. Quarterly revenues are creeping toward $1 billion while net income soared 24.5 percent over second quarter 2011.
Smith insists neither the big expansion nor the company's emphasis on cost savings will be felt by customers at any of its five chains: Outback, Carrabba's, Bonefish, and the smaller, more upscale Fleming's Prime Steakhouse and Wine Bar, and Roy's.
"One of our strengths is being known for high quality food at affordable prices," Smith said. "We do not intend to mess with that equation."
Her remarks, made to Wall Street analysts, are full of such buzz words as "productivity initiatives" and — a partial nod to the in-vogue baseball management book Moneyball — "analytics."
Smith says Bloomin' has built an analytics team to number-crunch consumer data and other trends to help the company decide everything from potential restaurant sites, menu offerings and pricing to whether individual restaurants have the right demographics to support a weekend lunch service.
"We spent years getting the lunch equation right before rolling it out," Smith said.
Smith rattles off how she and her team aim to keep its brands cutting edge, its menu prices affordable and its profits strong — even as food costs soar. The highlights:
• Frequent menu changes and "limited time only" deals are popular. Outback's pitching a four-course meal for $15, a deal that's supposed to push back at the more common 2-for-$20 menu offerings at such competitors as TGI Friday's and Chili's. And more Outbacks are now open for lunch on Saturdays and Sundays, even if the profit margins are thinner than at dinner.
• Calling Bonefish Grill the "top domestic priority," Smith says the seafood chain should double from 162 locations in the coming years. Concentrated in Florida and the southeast, recent Bonefish openings have been well received in New Jersey and other states. The chain, which opens in 19 new markets this year, added a "happy hour" menu and currently is rolling out a Sunday brunch menu.
• Bloomin' is redesigning the look of Carrabba's. It's also adding as many as 17 restaurants over the next two years to the 231 current locations.
• Finding new ways to keep costs down is also a big part of the Bloomin' strategy. "Labor productivity" methods help keep worker costs under control. And careful advance purchases of increasingly pricey beef — the core of Outback's appeal as the country's largest steak chain — keep a lid on inflation.
Apparently Wall Street analysts and investors like what Smith said. On a day when the Nasdaq was down, Bloomin' Brands shares rose 3.05 percent, closing Wednesday at $13.91.
Can Bloomin's actions match such an aggressive agenda? The people and talent are in place to do so, Smith insists. "We are a well oiled machine."
Contact Robert Trigaux at [email protected]