Outback's reopened locations report sales down only 17%

Dive Brief:

Bloomin’ Brands, parent company of Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse and Wine Bar, provided preliminary Q1 results Tuesday, reporting that 23 Outback Steakhouses have reopened for dine-in service at limited capacity during the week ended May 3. Sales at those locations were down 17% from the prior year while there were limited declines in off-premise, according to a company release Tuesday.
"We are encouraged by these results, and as of the end of day today, we expect to have 336 total Bloomin’ Brands restaurant dining rooms opened with limited seating capacity across multiple states," CEO Dave Deno said in a statement.
During the crisis, Bloomin’ Brands shifted its business to off-premise and, as a result, tripled its average off-premise sales per restaurant since the beginning of March.

Dive Insight:

With many major casual dining brands reporting year-over-year sales declines of 20% to 40% during the crisis, it’s no wonder why Outback’s 17% drop is encouraging for Deno, particularly because those sales numbers include restaurants with limited seating.

BTIG analyst Peter Saleh recently wrote that relief is within reach for casual dining chains that have found a cadence in off-premise business, and this seems to be the case for Bloomin’. Darden’s same-store sales quarter-to-date sales, by comparison, were down nearly 45% in late April, while Olive Garden was down by 38%.

Outback in particular may have a bit of an advantage here. The company has spent the past two years developing its own in-house delivery platform and added DoorDash in 2019 to complement that infrastructure and enable the company to scale its delivery more quickly. Because it already had a strong channel, the company didn’t have to overhaul too much of its operational model when the nationwide lockdown went into place, unlike some of its peers. Its customers were also already familiar with the platform.

“[These results are] a testament to the strong affinity for our brands, and our decision to invest significantly over a number of years into building a robust delivery network to complement our take-out business. These outstanding off-premises results have allowed us to keep substantially all of our locations open during this time,” Deno said in Tuesday’s release.

The weekly off-premise sales trajectory for Outback does paint an insightful picture of just how quickly its customers shifted their engagement with the brand. During the week of March 22, for example, Outback pulled in about $22,000 a week per restaurant in off-premise channels. By the week of May 3, that number jumped to nearly $40,000.

During Q1 earnings calls thus far, a number of executives, from McDonald’s to Dunkin’, have suggested that familiar, traditional restaurant companies are what consumers are craving right now. Considering these numbers, Outback may be part of that narrative as well. Bloomin’ Brands’ earnings call is Friday, which will provide more color on what could be a case study for casual dining.