Outback Steakhouse’s parent company abruptly closed 21 restaurants across the country in October as part of a sweeping cost-cutting plan.
Bloomin’ Brands said in an earnings filing Thursday that the closures mark the start of a “comprehensive turnaround strategy” that will see 22 more Outback locations close over the next four years as leases expire.
So far this year, Bloomin’ Brands’ stock has plunged over 40%, reflecting investor concerns over shrinking margins and stalled traffic across its brands.
Last month’s closures targeted Outback Steakhouse restaurants, known for their kitschy Australian theme, and other Bloomin’ Brands eateries — Carrabba’s and Bonefish. Bloomin’ Brands declined to provide a breakdown of the 21 total shutdowns.
The company said the decision was driven by underperforming units, shifting consumer spending and intensifying competition from value-driven rivals like Texas Roadhouse, LongHorn Steakhouse, Chili’s and Applebee’s.
Bloomin’ Brands said it will take a $33 million impairment charge — a cut to the intangible asset known as “goodwill” — tied to the October closures, along with another $5 to $7 million in severance and shutdown expenses expected in the fourth quarter.
Outback currently operates about 670 restaurants across the US — roughly 10% fewer than a decade ago, when it had around 750 locations.
The company also suspended its shareholder dividend to preserve cash for debt repayment and store investments, while unveiling a $75 million, three-year reinvestment plan focused on improving menu quality and customer service.
“Outback Steakhouse has incredible brand equity,” CEO Mike Spanos said in a Thursday earnings call.
“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.”
Spanos said the company is betting on a leaner footprint and higher service standards to turn performance around.
Servers will handle fewer tables per shift — dropping from six to four — as part of an effort to boost customer satisfaction and check averages, according to FSR magazine.
Bloomin’ Brands said every remaining Outback location will be remodeled by the end of 2028.
The redesign includes brighter interiors, smaller kitchens and expanded pickup areas to meet rising demand for takeout.
In spite of its punishing stock performance so far this year, Outback’s latest quarter showed faint signs of stabilization as same-store sales ticked up 0.4% — the first positive result in two years. But rivals continue to outperform.
Texas Roadhouse reported same-store sales up 5.8%, while Darden’s LongHorn Steakhouse saw a 5.5% gain in its most recent quarter.
Analysts say Outback’s challenge is convincing consumers that its prices are worth it even as competitors emphasize larger portions and aggressive promotions.
Outback’s turnaround plan marks the latest in a series of retrenchments by major dining chains struggling to adapt to post-pandemic spending patterns.
In February 2024, Bloomin’ Brands closed 41 other restaurants across its portfolio, citing high rent and labor costs.
The company said the latest cuts are necessary to foster “long-term, sustainable, and profitable growth.”
The Post has sought comment from Bloomin’ Brands.
