Latest news with #MikeSpanos
Yahoo
08-05-2025
- Business
- Yahoo
Bloomin' Brands revenues decline 1.8% in Q1 2025
Casual dining restaurant company Bloomin' Brands has reported a 1.8% decrease in total revenues to $1.04bn for the first quarter (Q1) of 2025, compared to $1.06bn posted in the same period of 2024. The decline was mainly due to net restaurant closures and lower comparable sales. Net income attributable to Bloomin' Brands was $42.1m for the quarter, compared to a net loss of $83.8m in the corresponding period of the previous year. The company reported an adjusted diluted earnings per share of $0.59, compared to $0.64 in Q1 2024. Generally accepted accounting principles operating income margin from continuing operations declined from Q1 2024 due to lower restaurant-level margins and restructuring costs, partially offset by previous-year impairment and closure charges related to the shutdown of 36 US restaurants. Total US segment revenues decreased slightly to $1.03bn in Q1 2025, compared to $1.04bn in the same period of 2024. Bloomin' Brands' restaurant portfolio comprises Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse & Wine Bar. The company owns, operates and franchises 1,450 restaurants in 46 US states, the US territory of Guam, and 12 countries. No shares were repurchased in 2025 and $96.8m remains under the 2024 programme. Bloomin' Brands CEO Mike Spanos stated: 'We continue to make progress on our operating priorities to simplify the business and consistently deliver a great guest experience while balancing our longer-term priorities to turnaround Outback and drive sustainable sales and profit growth. 'We are navigating a choppy macro environment and are leaning into our abundant everyday value offerings. This is reflected in our current guidance.' In August 2023, American hedge fund Starboard Value acquired a stake of more than 5% in Bloomin' Brands. "Bloomin' Brands revenues decline 1.8% in Q1 2025" was originally created and published by Verdict Food Service, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
30-03-2025
- Business
- CNN
Outback is no longer America's king of steaks
Summary Texas Roadhouse and LongHorn have surpassed Outback Steakhouse as America's preferred steakhouse chains. Outback parent company Bloomin' Brands stock has fallen more than 70% while competitors' stocks have risen. Customers perceive competitors as offering better value, higher quality food and more vibrant dining experiences. New Outback CEO Mike Spanos aims to simplify the menu and improve restaurant operations. Outback plans to reduce promotions, focus on consistent pricing and remodel existing locations before expanding. Americans don't want Outback's Aussie-themed steaks anymore. Instead, they're craving Texas-style cuts from Texas Roadhouse and LongHorn's tender filets. Texas Roadhouse and LongHorn's sales topped Outback's last year, and the chains' stocks are going in different directions. Texas Roadhouse's stock has increased around 15% over the last year, while shares of LongHorn-owner Darden jumped around 25%. Meanwhile, Outback parent company Bloomin' Brands' stock has tumbled more than 70% to roughly $8 a share. As inflation pressures cut into consumers' spending, Americans are abandoning casual dining chains they don't perceive as good value such as Outback and TGI Fridays. Instead, they are shifting to Roadhouse, LongHorn, Chili's and other chains they feel offer them a better deal when they go out to dinner. It's a steep fall for Outback, which defined the casual dining steakhouse model in the United States. Founded in 1988, customers jumped on Outback's cheap, juicy sirloin steaks and deep-fried onion blossoms during the 1990s and 2000s. But Outback's mistakes and competitors' innovative strategies have tipped the power order in the restaurant steak wars. Outback hiked prices too high, relied too heavily on promotions to draw diners, and cut costs too far. Customers and analysts alike say food quality suffered, table service slowed and restaurants became dingy. Outback is also more expensive: The chain's check average was $29 last year — $6 above Roadhouse and $2.50 more than LongHorn. That allowed Roadhouse to peel off Outback's budget-conscious customers, while LongHorn won diners by increasing the size of its steaks. Both chains also increased prices at a slower pace than Outback while investing in their staffs and restaurant remodels. These factors, combined with better menu quality, has led to the success of these brands, according to RJ Hottovy, an analyst at Roadhouse and Longhorn both rank at the top of the American Customer Satisfaction Index, a benchmark of consumers' opinions about restaurants and fast-food chains. Outback was Richard Mathis's favorite restaurant in high school, even celebrating his graduation there. But he says Outback is 'consistently disappointing' these days. 'When I go into an Outback now, it feels sterile and cold. They just don't feel fun,' Mathis said. 'I want to eat and leave. I don't feel any desire to hang out there.' He now prefers Texas Roadhouse when he goes out to eat with his wife or friends. The steak is better, the staff is friendlier and it's 'fun, bright and there's music,' he said. 'Roadhouse feels like going to a country bar.' Although the three chains are all casual steakhouses, there are key differences that explain their divergent performance. Outback, whose concept was based on the movie 'Crocodile Dundee,' spread nationally during the 1990s and 2000s. Although its four founders were not Australian, Outback had faux-Australian items on the menu like 'Ribs on the Barbie' and 'Walkabout Soup.' The chain sold a wider variety of casual fare beyond steaks, becoming recognized for its signature items like the 'Bloomin' Onion' and 'Alice Springs Chicken.' But the size of the menu became unwieldy for staff as the chain also offered limited-time promotions to try to spur customers to visit. Location mattered as well. Outback for years opened restaurants around malls, but that backfired as foot traffic to malls dwindled. Outback has closed dozens of its older restaurants in recent years. As Outback struggled, competitors stepped in. Texas Roadhouse stuck to lower prices on most items compared to the one-off promotions at Outback. The chain also won over customers with its lively, rodeo-style restaurants, featuring wood-paneled walls, murals and upbeat country tunes. Roadhouse distinguished its brand with free peanuts, bread rolls with honey cinnamon butter and occasional line dancing by waiters. 'Roadhouse is winning because they have a much better value proposition than anybody else,' said Peter Saleh, an analyst at BTIG. LongHorn has stood out through its upscale-dining feel and bigger steaks for similar prices to Outback's. LongHorn started in the early 1980s as a budget-friendly roadhouse restaurant. But LongHorn ditched that concept and moved upmarket to court higher-income diners. In 2007, Darden, the owner of Olive Garden, Capital Grille and Cheddar's Scratch Kitchen, bought LongHorn. 'LongHorn has made significant investments over the years in quality, and that continues to pay off,' Darden CEO Rick Cardenas said last year. He noted that LongHorn was attracting customers trading down from fine-dining restaurants. But Outback says it can return to its past glory. 'Consumer research shows there is an affinity for [Outback],' a spokesperson for Bloomin' Brands told CNN. 'With the investments we're making to improve operations and deliver a better guest experience, we are excited about the future potential of our business.' Despite its recent struggles, Outback believes it can turn its business around with a new strategy and leadership. Mike Spanos, the former chief operating officer at Delta, became CEO of Outback parent Bloomin' last year. Outback also has a new president, Pat Hafner, a 29-year veteran of the chain. 'Outback is a great business. It is a great brand,' Spanos said last month. 'It is a very fixable business.' Outback plans to cut 20% of the menu and reduce limited-time promotions to simplify operations for restaurant staff. These promotional offers hurt Outback's profit and created bottlenecks for workers. Instead, Outback will shift to setting consistently low prices. 'We were featuring items in short promotional periods that created complexity for our operators, and we failed to drive value in our core' menu items, Spanos said. Outback also will slow its new restaurant openings and direct its investments to remodeling current locations. 'We need to focus on getting the guest experience right before we earn the right to grow,' he said. Chili's recent turnaround offers hope for Outback and a roadmap it can follow. Chili's has unexpectedly pulled off its comeback thanks to upgraded French fry and chicken tender recipes, fast food-like prices and viral TikTok videos of customers pulling apart its gooey mozzarella sticks. Chili's sales at restaurants open for at least a year increased a whopping 31% last quarter. It was Chili's third-straight quarter of double-digit sales growth. Old Outback customers like Richard Mathis are rooting for a Chili's-like comeback. 'I love the brand and wish it was back to the way it was,' he said. 'I want to go to Outback.'
Yahoo
27-02-2025
- Business
- Yahoo
Bloomin Brands Inc (BLMN) Q4 2024 Earnings Call Highlights: Strategic Shifts Amidst Market ...
Release Date: February 26, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Bloomin Brands Inc (NASDAQ:BLMN) has initiated a holistic strategy to improve business results in 2025, focusing on simplifying operations and enhancing guest experiences. The company has refranchised its Brazil operations, retaining a 33% ownership, which de-risks the business model and allows management to focus on domestic growth. BLMN is implementing a menu simplification strategy, reducing menu items by 10-20% to improve quality and operational efficiency. The introduction of Ziosk technology at Outback is expected to enhance guest satisfaction and operational efficiency, with 80% of guests using pay-at-the-table features in test locations. The company is focusing on sustainable traffic and sales growth by improving quality, value, and guest experience, with a particular emphasis on turning around the Outback brand. Bloomin Brands Inc (NASDAQ:BLMN) underperformed the industry in Q4 2024, losing market share by 260 basis points on sales and 410 basis points on traffic. The company's Q4 2024 revenues were down 8% from the previous year, primarily due to the absence of a 53rd week and restaurant closures. BLMN's Q4 adjusted operating margins declined to 4.4% from 7.5% the previous year, impacted by inflationary pressures on labor and restaurant operating expenses. The company reported a GAAP diluted earnings per share loss of $0.93 in Q4 2024, compared to a profit of $0.45 in 2023, due to impairments and tax expenses related to the Brazil transaction. BLMN's guidance for 2025 anticipates flat to negative 2% US comparable restaurant sales, with continued pressure from labor and commodity inflation. Warning! GuruFocus has detected 4 Warning Signs with BLMN. Q: Mike Spanos, you've expressed the importance of taking care of the people and helping ensure they can do their jobs well. Can you give a sense of the timeline for these actions and any other big changes you want to look at? A: We started quickly with leadership changes and the Brazil transaction to de-risk and simplify the business. We've also de-layered the organization to empower brand-level decision-making. Menu reductions will be implemented by May, and Ziosk will be in place by the end of April. The focus is on abundant everyday value, with significant benefits expected in the second half of the year. Q: Should we consider similar trends by brand for the first quarter as seen in the fourth quarter? A: Yes, the trends by brand observed in the fourth quarter are expected to be consistent in the first quarter. Q: Are there any underlying changes in consumer spending beyond weather and holiday shifts? A: We see a choppy environment and a choosy consumer, particularly in the short term. There is some check management among households under $100,000, affecting appetizer mix and beverage attachments. However, long-term trends remain positive, and we are meeting consumers with the right value to encourage visits. Q: What is the main opportunity for improving the guest experience? A: The main opportunity lies in consistency of execution, focusing on quality, value, and guest experience to drive intent to return and frequency of visitation. Q: How are you envisioning the Outback value strategy as you move away from LTOs? A: The focus is on abundant everyday value, exemplified by the Aussie 3 Course, which has shown strong guest engagement and trade-up behavior. This strategy builds brand trust and encourages frequent visits, aligning with our goal of delivering consistent value and simplifying operations. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
