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Struggles continue at Tampa-based Bonefish Grill, Outback Steakhouse and Carrabba's

Bonefish Grill of Tampa's Bloomin' Brands continued to struggle in the first quarter of 2016.
Bonefish Grill of Tampa's Bloomin' Brands continued to struggle in the first quarter of 2016.
Published Apr. 26, 2016

Restaurant sales were down nearly across the board at Tampa-based Bloomin' Brands for the first quarter of 2016.

Bonefish Grill had the biggest decline for the quarter with a 2.7 percent dip in sales, continuing a trend at that chain.

Carrabba's Italian Grill reported a 2 percent decline in sales during the three-month period that ended March 27, despite having launched a new menu in January that focused on smaller portions and healthier options.

Outback Steakhouse sales declined by 1.3 percent in the U.S. Fleming's Prime Steakhouse & Wine Bar was the only restaurant to report an increase, of 1.3 percent, for the first quarter.

RELATED: Bonefish Grill to close 14 restaurants and restructure

Overall, sales in the U.S. for Bloomin' Brands restaurants combined were down 1.5 percent.

"Our first quarter earnings were in line with our expectations," said Liz Smith, CEO of Bloomin' Brands, during a call with investors Tuesday morning. "As we indicated in February, we expect our performance to strengthen in the back half of the year."

Bloomin' recorded a 1.7 percent dip in revenue during the first quarter of 2016 as compared to the same period in 2015.

Smith said that the first half of 2016 will be one of new investment and restructuring, as the company's "top priority is restoring sales growth in the U.S."

Bloomin' Brands launched a new smartphone app for Outback that allows customers to pay from the table. The chain will undergo menu changes this year to "reinforce its steak authority," which will include larger entree portions and product upgrades, she said. Some Outback Steakhouse locations will also be remodeled this year.

The roll out of these changes have "driven customer satisfaction to the highest recorded levels" at Outback, Smith said, "which is very encouraging and a key part of the plan to drive sales growth."

While executives did anticipate some decline at Carrabba's this quarter, Smith said it was down more than expected.

"The current average guest only visits a few times a year," she said. One of their goals is to increase that frequency through the revamped menu.

RELATED: Will a new menu aimed at younger diners help Carrabba's Italian Grill?

Bonefish continues to struggle after a disappointing 2015. In February, Bloomin' announced it would close 14 Bonefish restaurants this year, though no location in the Tampa Bay area will be shut down.

However, the decline is shrinking. In the third quarter of 2015, Bonefish recorded a 6.1 percent decrease and in the fourth a 5.4 percent dip. The first quarter this year was down 2.7 percent.

Bloomin' is launching a new marketing campaign, which includes television advertisements "in an effort to restore the brand to growth through the back half of 2016," Smith said. "It pivots away from the discount-driven messaging over the last two years."

Beyond the U.S., Bloomin' Brands' second priority is to continue growing international business, Smith said. Outback continues to see strong growth in Brazil, a relatively new market for the chain. Sales grew by 8.8 percent there this quarter. However, Outback sales in South Korea were down by 5.6 percent.

Smith said Bloomin' sees opportunities for more growth in Brazil, despite the political and economic uncertainty in the country, and in new markets in Latin America and China.

Fleming's opened its first restaurant in San Paulo, Brazil, in December. Two Outback locations opened in Brazil during the first quarter.

Bloomin' Brands opened eight new restaurants in 2016, five of which opened overseas.

"We repurchased $75 million worth of stock in the first quarter. This was enabled by our strong free cash flow and the great progress we are making in our efforts to sell our owned real estate," Smith said. "We will continue to explore additional opportunities within our portfolio to maximize shareholder value."

Bloomin' shares closed Tuesday at $18.85, up 8.5 percent.

In addition, Smith announced during the call with investors that Bloomin' Brands has hired Chris Brandt, formerly of Taco Bell, as chief brand officer. He will oversee brand strategy for all four restaurant chains. This is a similar job to the position recently vacated by Mike Kappitt, who was chief marketing officer at Bloomin' but was promoted to president of Carrabba's. Brandt also worked at Odwalla and General Mills.

Reach Justine Griffin at jgriffin@tampabay.com. Follow @SunBizGriffin