Outback’s parent company abruptly closed 21 restaurants
By Jordan Valinsky, CNN
New York (CNN) — Outback Steakhouse’s parent company abruptly closed 21 restaurants in October as it begins a “comprehensive turnaround strategy” to keep up with its trendier competitors.
Bloomin’ Brands, Outback’s parent company, disclosed in its earnings report Thursday that in addition to those closures, an additional 22 locations across its three brands — which also includes Carrabba’s Italian Grill and Bonefish Grill — will not have their leases renewed and will shutter over the next four years.
A company spokesperson wouldn’t reveal how many Outback locations it specifically closed.
Outback has 670 US locations remaining, according to its website. That’s roughly 10% fewer than a decade ago, when it had about 750 locations.
Bloomin’ Brands also announced that it will take a $33 million impairment charge for the closures and suspended its shareholder dividend to help pay for the turnaround plan.
The company revealed more details in a call with analysts Thursday morning, saying it’s investing $75 million in the Outback turnaround plan over the next three years. Guests will soon see new menus highlighting the improved steaks the chain is selling. It is also increasing value offers and reducing the number of tables waiters serve from six to four to improve the dining experience.
“Outback Steakhouse has incredible brand equity,” said CEO Mike Spanos. “It is the pioneer of the casual steakhouse industry. We have strong brand awareness and a tremendous opportunity to convert that awareness into restaurant visits.”
All of its remaining restaurants will be renovated by the end of 2028. The redesign has brighter interiors with a newly designed bar and seats as well as smaller kitchens and expanded areas for pickup.
Outback has been struggling for the past two years and hasn’t posted same-store sales until this quarter, when sales rose a meager 0.4%.
Meanwhile, Darden-owned LongHorn Steakhouse posted a 5.5% rise and Texas Roadhouse generate a 5.8% jump in sales in their most recent earnings reports.
Diners are becoming choosier with their dollars when going out, and are not spending money at chains that they don’t perceive as good value. That’s helped Outback’s rivals, which serve heaping portions; and other chains, like Chili’s and Applebee’s that are focused on value and deals.
Bloomin’ Brands (BLMN) stock has lost 40% of its value since the beginning of the year.
This story has been updated to clarify the number of closures.
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