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Business Observer Friday, May 15, 2020 1 month ago

For restaurant firm, shutdown cuts revenues like a steak knife

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Outback Steakhouse's Tampa-based parent company, Bloomin' Brands, details the harsh toll COVID-19 has taken on its finances.

Bloomin’ Brands, the Tampa-based company that owns Outback Steakhouse and several other fast-casual restaurant brands, has sustained heavy losses during the COVID-19 crisis. On May 4, CEO David Deno provided an unvarnished look at the extent to which the $4 billion company sales have suffered as a result of the coronavirus pandemic. 

In a press release that announced its first quarter financial results, Bloomin’ (NASDAQ: BLMN) says Outback Steakhouse sales declined 28.1% in the five weeks that ended March 29. Bonefish Grill, another Bloomin’ restaurant brand, saw sales fall 38.6% during the same period. 

The virus halted positive momentum for all Bloomin’ concepts, which also include Carraba’s Italian Grill and Fleming’s Prime Steakhouse & Wine Bar. For example, in the five weeks ended Feb. 23, Outback sales were up 2.2%; Carraba’s was doing well, too, with sales up 4.5%. 

As a company, the release states, Bloomin’ revenue declined by more than $41.5 million during the 13 weeks that ended March 29. Compare that to the first quarter of 2019, when total income from operations was nearly $82.5 million. 

Likewise, net income for the first quarter of 2020 was $12.48 million, whereas in Q1 of 2019, that figure was $69.49 million. 

Like many other companies, Bloomin’ Brands, Deno states in the release, has “stopped non-essential spending, significantly reduced marketing expenses and deferred nearly all of our capital expenditures.” 

Deno himself has decided to forego his base salary amid the crisis. He adds, in the release, “These efforts have allowed us to minimize our ongoing cash burn. Also, our decision not to terminate or furlough any of our employees will allow us to reopen dining rooms quickly with no re-hiring or training expenses.” Bloomin’ has some 94,000 full-time employees.

Deno, in the release, also says Bloomin’ has paused the evaluation of “strategic alternatives,” which could include the sale of the company, a process initiated in November in response to what Deno calls “ongoing valuation disconnect.” 

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