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Inflation dents profits, prices may rise at Tampa’s Outback, Carrabba’s

The chains’ parent company, Bloomin’ Brands, raised revenue expectations for the year, but said costs would also go up.
Bloomin' Brands, the parent company of Outback Steakhouse, said on a Friday earnings call that inflation in utility, labor and commodities costs would eat into its profits for the second half of 2022.
Bloomin' Brands, the parent company of Outback Steakhouse, said on a Friday earnings call that inflation in utility, labor and commodities costs would eat into its profits for the second half of 2022. [ DOUGLAS R. CLIFFORD | Times ]
Published Jul. 29|Updated Jul. 29

Tampa’s Bloomin’ Brands, the parent company of restaurants like Outback Steakhouse and Bonefish Grill, raised its revenue expectations for the year on Friday after reporting solid sales from April to June, topping the same period last year by 5%.

But the company also reported a net quarterly loss for the first time since late 2020, as rising costs across the industry cut into profit margins, and said customers are likely to see menu prices increase slightly by this fall.

Bloomin’, which also owns Carrabba’s Italian Grill and Fleming’s Prime Steakhouse and Wine Bar, reported an unadjusted loss of 72 cents per share (a loss that turned to a 68-cent increase when adjusting for factors like extinguishing debt). That translated to a net loss of $63 million in April, May and June.

Still, the company’s $1.1 billion in revenues for the quarter beat some analysts’ expectations, prompting the company to raise its expected total annual revenue to above $4.4 billion. While U.S. sales were down year-to-year, international sales were way up — and all sales were up from 2019, thanks in part to increased takeout and delivery business and more efficient back-of-house technology.

Overall, CEO David Deno called it “another solid quarter” for the company.

Related: Are Bloomin' Onions the next Bored Apes? Could be, says Outback's top exec

“We continue to benefit from simplified menus and operations, growth in our international business, as well as increased average check,” chief financial officer Chris Meyer said on a call with investors.

The company’s strongest headwinds came in the form of inflation. The cost of labor, utilities, operating expenses, advertising and commodities like seafood and dairy rose between 10% and 20% year-over-year, Deno said. For its part, the company raised menu prices about 5.8% during the first half of the year and may raise them another 2% by September.

Deno said the company has not yet seen customers balk at the price hikes, and the company “will continue to price below inflation to make sure we keep that value equation going.”

Related: Tampa's Outback made Bloomin' Onion NFTs. They were gone in 20 minutes.

Bloomin’ is on track to open 30 new restaurants this year, Meyer said, although some construction projects might be pushed to 2023.

While down from a peak of $24.97 per share in February, Bloomin’ stock has risen steadily since mid-June. After closing at $19.78 per share on Thursday, the stock was up to $20.40 by mid-morning.

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