Executives are considering future initiatives, about which they were not specific, for the 926-unit Outback chain. This follows a consumer study on the restaurants that shows, among other things, that the restaurants are facing stiff competition from other chains.
"Outback has a very loyal fan base, but it's beginning to suffer some subtle brand erosion," Allen says. "We've got to reverse this narrowing-appeal issue." One possible remedy he did mention was the renovations of its stores, which is a 12-to-18-month process.
Meanwhile, the company is opening 125 new restaurants this year and plans to step up its marketing efforts. Other than the Outback chain, it operates 205 Carrabba's Italian Grills, 103 Bonefish Grills, 40 Fleming's Prime Steakhouse and Wine Bars, 32 Cheeseburger in Paradise units, and 21 Roy
Same-store sales were "below expectations" for the fourth quarter, executives said. Outback posted a 0.9% drop, while Carrabba's grew 2.7% and Bonefish rose 2%. Management also lowered their same-store expectations for the coming year predicting that Outbacks would be flat to inching up 0.5%, instead of the previous 0.5% to 1% gain that was previously forecast. They also shaved Carrabba's gain to 1.5% to 2%, from 2% to 2.5%.
Net income for the quarter fell to $33 million, from close to $51 million during the same year-ago period. Revenues jumped 10.6%, to $990 million.
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