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Tuesday, Sep 18, 2018
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Outback Steakhouse owner Bloomin’ Brands beats Wall Street forecasts

TAMPA — Outback Steakhouse has been pressured to improve for awhile, but the restaurant chain isn’t cooked yet. In fact, a boost in Outback sales led its Tampa-based parent company to beat Wall Street expectations in its fourth quarter.

Bloomin’ Brands, which also owns Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse, reported fourth-quarter net income of $16.4 million. The company had posted a loss for the same quarter a year before, pushing it to shake up its strategies.

Bloomin’s stock jumped nearly 8 percent on the news Thursday to close at $23.75 per share.

"They haven’t given up the fight yet," said Brian Connors, a hospitality consultant with Connors Davis Hospitality in Fort Lauderdale. "They realize they need to change to stay relevant for a fast-changing demographic."

CEO Liz Smith said Outback’s remodels, loyalty rewards program, the brand’s expansion in Brazil and new delivery and takeout options at all its restaurants helped the restaurant group notch a per-share profit of 17 cents which, adjusted for one-time gains and costs, translated to 41 cents a share.

The average estimate of eight analysts surveyed by Zacks Investment Research had put the restaurant conglomerate’s earnings at 2 cents below what the company wound up reporting.

Bloomin’ Brand’s revenue of $1.09 billion also topped average analyst forecasts of $1.06 billion, according to Zacks.

"Outback’s Q4 sales and traffic performance were well ahead of the industry," Smith said during a conference call with investors, "and reflect the ongoing impact of our investments in the customer experience."

The financial results came a day after an activist investor called for Outback Steakhouse to exist on its own. That would push Bloomin’ Brands remaining restaurants, which have sale increases well below Outback’s nearly 5 percent climb this year in the U.S. and Brazil, into a separate company.

EARLIER COVERAGE: Investor calls for Bloomin’ Brands to let Outback Steakhouse stand alone

For the year, the company reported profit of $100.2 million, or $1.01 per share, on $4.21 billion in revenue. Bloomin’ Brands expects full-year earnings in the range of $1.38 to $1.45 per share.

Connors said in a market driven by independent eateries and UberEats deliveries, Bloomin Brands will have to continue to adapt their methods while maintaining what draws core customers through the door.

"The good news for chains units is they have a great sense of familiarity or comfort with a guest," he said. "That might appeal to a set demographic that isn’t Gen X or millennials, but to someone who goes to Carrabba’s because they know exactly what they’re going to get."

In 2017, Smith said 240 of the brand’s restaurants were offering delivery and the company continues to roll out express pick-up only Carrabba’s and Outback Steakhouse locations, like the one on Gandy Boulevard in Tampa.

READ MORE: Outback Steakhouse, Carrabba’s experimenting with takeout-only locations

Smith expects to have eight of the express locations open by the end of the year. She forecast that this "off-premise experience" could account a quarter of the conglomerate’s total sales.

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"This smaller-footprint concept will be utilized to expand our reach in both new and fill-in trade areas" Smith told investors. "Although it is early, initial results are promising."

Times wires were used in this report. Contact Sara DiNatale at [email protected] Follow @sara_dinatale.

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