The Italian Chain Opened a Restaurant for the First Time in Seven Years, and More Is To Come in Markets Like Florida, Texas, Tennessee, and Georgia.
In the third quarter, Carrabba's opened a restaurant in Tampa—the chain's first new unit since 2015.
Bloomin' CEO David Deno said the Italian brand earned the right to expand because it's been among the top performers in the company over the past three years.
In Q3, the chain's same-store sales lifted 0.7 percent year-over-year, but 18 percent versus 2019—that's second only to Fleming's Prime Steakhouse, which saw 29.6 percent growth versus pre-pandemic comparisons. It earned $62,010 in average weekly sales per restaurant, equal to a $3.2 million annualized AUV. That's well above the $51,989 mark during the same period in 2019; only Fleming's saw a bigger improvement over three years.
Traffic decreased 8.4 percent year-over-year, but lifted 2.9 percent compared to three years ago, second-best in the company (Fleming's was the highest at 9.1 percent against three years ago). Average check per person soared 9.1 percent year-over-year, tied with Outback for best in the Bloomin' umbrella.
The chief executive noted that the recent opening in Tampa is "performing extremely well and provides optimism about the future growth potential of the brand." Carrabba's ended Q3 with 218 stores nationwide. Of that number, 199 are company-owned and 19 are franchised. The last time new restaurants debuted, there were close to 250 units in the U.S.
"We're working on the box, we're working on the economics," Deno said during Bloomin's Q3 earnings call. "We're working on a business that has 35 percent, 40 percent off-premises, which is just amazing. And we think we have an expansion opportunity here that's really great. In fact, we just talked with our board about that last week."
In addition to traditional stores, Carrabba's is exploring a takeout/delivery-focused location because of its robust off-premises business. In the third quarter, sales outside the four walls mixed 33 percent, best in the Bloomin' family. Next closest is Outback at 27 percent. It also leads in catering; the restaurant saw a 46 percent rise in 2021 compared to 2019. Outback followed with nationwide catering in April, and Bonefish Grill did the same during the summer.
Deno identified Florida, Texas, Tennessee, and Georgia as stronghold markets. Carrabba's is based in 29 states, from Utah to New Hampshire. Its biggest footprint is in Florida (69), Texas (14), and Georgia, North Carolina, and Virginia (13). Mark Graff, senior vice president of business development and financial planning, is working with the team to find the best opportunities.
"Kudos to the brand and the team, between sales and profits and everything else, and leading the way," the CEO said.
Growth is on the way for Outback and Fleming's as well. Outback in particular—which has 692 restaurants domestically—is moving toward a nearly 5,000-square-foot NextGen prototype, a decrease from its roughly 6,000-square-foot legacy box. Five have opened so far, and the steakhouse believes there's room to open 75-100 of these slimmer restaurants in the coming years. The updated building includes an off-premises room tacked onto the side of the building, which reduces interference with day-to-day operations. Additionally, remodels are offering good returns, and relocations are leading to $4.7 million in AUV—well above the system average.
Outback's same-store sales rose 2.3 percent year-over-year in Q3, and 8.5 percent compared to 2019. Average weekly sales per restaurant were $72,834—$3.79 million in annualized AUV—and that's up from $66,084 in 2019. Seventy-seven percent of off-premises orders were digital, and the updated mobile app—debuting last year—now has more than 2 million downloads.
For Fleming's, Deno said the company is "building first-class facilities on great real estate," mostly in Florida, California, and Texas. The latest unit is set to open in Fort Lauderdale in December. There are currently 64 units in the U.S., all of them company-owned. The fine-dining concept is based in 25 states, with California (13) and Florida (eight) being the biggest markets. Fleming's average weekly sales per restaurant were $97,053 in the third quarter, $5.01 million annualized AUV, versus $71,954 in 2019. Comps rose 1.3 percent year-over-year.
"I'm very pleased with where we're going," Deno said. "The smaller box, what we refer to as the 'joey' box at Outback, is opening very well, providing excellent returns at lower costs. And we're building in our stronghold markets, and we're seeing really great performance in Florida, for instance, and other places. ... Fleming's Prime Steakhouse, you've seen their numbers. The profitability is very strong. We're getting some wonderful sites."
Bloomin's fourth major brand, Bonefish Grill, saw same-store sales drop 0.9 percent versus 2021, but grow 4.8 percent compared to 2019. Average weekly sales per unit were $57,998, an increase from $53,549 pre-pandemic. The seafood chain ended Q3 with 180 locations, including 173 company-owned stores and seven franchises.
Menu prices were 7.3 percent higher year-over-year, up from 5.8 percent in the second quarter. The growth was driven by a 3 percent hike in late August. Bloomin' took additional pricing in October to replace a portion of 2021 actions that will fall off in late November. The chain said it's not seeing any pullback from customers in the face of inflation.
Total revenues in Q3 were $1,055.8 billion, 4.5 percent growth from $1010.5 billion in the year-ago period. Because of the better-than-expected performance in the quarter, Bloomin' raised its 2022 year-end revenue guidance from $4.436 billion to $4.466 billion, an increase from $4.40 billion to $4.45 billion.