Posted: May 10, 2020
Restaurant holding company Bloomin’ Brands is doubling down on takeout and delivery services after sales grew exponentially during the coronavirus lockdown, CEO David Deno told CNBC Friday.
Bloomin’, the parent of Outback Steakhouse and Carrabba’s Italian Grill among other dining chains, saw its off-premise business triple while much of the country was under stay-at-home orders.
“From the time it started until today we’ve tripled our off-premise business, so that means carryout and delivery,” Deno said in an appearance on “Closing Bell,” after the company reported first-quarter results. “That’ll really help us as we go forward in our business.”
Bloomin’ same-store sales and net revenue both fell more than 10% year over year in the quarter ended March 31. Revenue of $1.01 billion was just below Wall Street’s expectations, according to FactSet. The company reported 14 cents of earnings per share, which missed the FactSet consensus estimate of 35 cents per share.
Shares jumped 13% Friday to close at $11.20. The stock remains down 49% in 2020 as the restaurant industry saw foot traffic disappear in March as consumers quarantined.
Takeout and delivery orders are helping Bloomin reach “break-even flowthrough,” given the losses from normal operations, Deno added. About two-thirds of off-premise sales has been via takeout and the rest come from deliveries, whether from Bloomin’s delivery network or third-party services.
Bloomin’ is looking to leverage the uptick in pickup orders to make up for lost revenues in its dining rooms. More than 355 of its locations were open as of Thursday, with seating capacity reduced by three-quarters in 10 states where dining in is available, Deno said.
Customers enter a Bloomin' Brands' Outback Steakhouse restaurant at the Queens Place Mall in the Queens borough of New York.
Customers enter a Bloomin’ Brands’ Outback Steakhouse restaurant at the Queens Place Mall in the Queens borough of New York.
Victor J. Blue | Bloomberg | Getty Images
Investing in delivery in recent years, including a rewards program and digital ordering, has paid off for Bloomin’ in the long run and will continue to pay off going forward, Deno said on the earnings call.
“We’ve kept our off-premise sales, which is so important because that’s a strong sales base for us as we move forward,” Deno said in an interview with CNBC. “We’re basically more than ... beating our variable costs as we open back up our restaurants even at 25% [seating capacity] because of our strong off-premise business.”
Restaurants are deemed essential businesses, so eateries are allowed to continue operating during the coronavirus outbreak. Business, though, is severely limited as dine-in services were banned by states in efforts to stop the spread of Covid-19. A handful of states, including Georgia, Tennessee and Texas, have recently allowed restaurants to resume sitdown service if they adhere to distance restrictions.
Bar seating at Bloomin’ stores remain closed and tables are further apart to ensure social distancing. Restaurant servers were retrained and are required to wear mask and gloves to ensure extra safety.
Bloomin’, which employs 94,000 people, kept everyone on its payrolls as the company and workforce weathered the pandemic.
It’s a bright spot in an industry that was among the hardest-hit corners of the economy last month. The Labor Department’s April jobs report out Friday showed 5.5 million positions were cut in restaurants and food services.
“We have not laid off one person or furloughed anybody in our company,” Deno said. “What that’s enabled us to do is, as the restaurants come back open, we have a trained staff opening the restaurants right away.”
By Tyler Clifford
May 8, 2020
Source and Complete Article: CNBC.com
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