Outback Steakhouse parent CEO: 'Times of uncertainty are the best to build'
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Feb 16, 2023

The parent company of Outback Steakhouse is gearing up to add new units and renovate restaurants across its portfolio — despite increasing uncertainty in the U.S. economy.

Tampa-based Bloomin' Brands Inc. on Thursday reported financial results for the fourth quarter and the fiscal year that ended Dec. 26. Total revenue was up nearly 5% compared to the fourth quarter of 2021 — $1.095 billion versus $1.047 billion a year ago. Total revenue for the year was $4.4 billion versus $4.1 billion a year ago.

While profits were down — Bloomin' reported quarterly profits of $58 million versus $60.7 million in the same time period a year ago — operating margins continued to rise. The company's operating income margin in the fourth quarter, consolidated from U.S. and international business segments, was 7.7%; in 2019, before the Covid-19 pandemic and subsequent inflation hikes, it was 4.8%, Bloomin' CEO David Deno told the Tampa Bay Business Journal.

In fiscal 2023, Bloomin' will focus on maintaining those margins, Deno said, as well as continuing to grow Outback Steakhouse and Fleming's Prime Steakhouse and Wine Bar. Bloomin' sees an opportunity to grow Fleming's and add six to eight Outback Steakhouse locations. Carrabba's Italian Grill, too, is gearing up to add new units.

In 2022, Bloomin' unveiled a new Outback prototype that's 16% smaller than existing stores and 20% cheaper to build.

"My experience has been that times of uncertainty are the best time to build," Deno said, "because people get hesitant and you can kind of come in, when you have a strong balance sheet as we do, and really make a lot of progress."

The company also plans to remodel 100 locations across its portfolio this year, 50 of which are Outback Steakhouses. Deno said Bloomin' has added to its corporate headcount in the real estate and technology departments, though he declined to say how many people had been hired.

And while the average headcount per restaurant is dropping — handheld point-of-sale systems have been rolled out chainwide at Outback Steakhouse, allowing servers to attend to six tables versus four — Bloomin's overall headcount will grow as the company opens new restaurants. The company has also recognized efficiencies from new kitchen technology that's been rolled out to about a third of its Outback locations. The technology improves steak order accuracy, minimizing the number of plates returned to the kitchen.

While construction costs haven't dropped to pre-pandemic pricing, Deno said the company is seeing prices beginning to drop.

"This kind of expansion would not be possible without major progress on our balance sheet," Deno said on the earnings call. "We significantly reduced our debt and our credit ratios are much improved."