Fancier steaks are all the rage for post-quarantined consumers: Outback Steakhouse owner
Armed with stimulus checks, a COVID-19 vaccine and more hope on their financial future after the pandemic, it appears U.S. consumers are hankering for a good cut of steak and a martini. And frankly, who could blame them.
"People are actually treating themselves a little bit more. They are getting a little fancier cut of steak or larger steaks," Bloomin' Brands (BLMN) CEO David Deno said on Yahoo Finance Live. "What we call the attachment rate — which is people getting appetizers or desserts or some alcohol — is higher. And so people are clearly treating themselves in this new environment."
The owner of Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse had a comeback first quarter as dining rooms reopened and people returned with their extra cash and improved mindset.
Same-restaurant sales increased 4.1% and 8.9% year-over-year, respectively, for Outback and Carrabba's in the first quarter. Meanwhile, same-restaurant sales at Bonefish Grill and Fleming's fell 2.3% and 2.9%, respectively.
Importantly for investors, sales exploded in April at most of Bloomin's restaurant brands as the economic recovery quickened.
The company said same-restaurant sales surged 13.3% at Outback in April 2021 versus April 2019 (pre-pandemic). For the same comparison, same-restaurant sales rose 18.6% for Carrabba's and 16.5% for Fleming's. Bonefish Grill clocked in with a 2.3% sales increase in April 2021 from April 2019.
Here is how Bloomin' Brands performed compared to Wall Street estimates for the first quarter:
Net Sales: $987.5 million vs. $953.2 million
Diluted EPS: $0.72 vs. $0.30
Bloomin' Brands shares are up 60% year-to-date to $30.71, trouncing the S&P 500's 12% gain. Pure play Bloomin' Brands' rival Darden — owner of Olive Garden — has seen its stock rise 23% year-to-date.
Wall Street is staying mostly upbeat in the wake of Bloomin's comeback quarter — analysts' sales and profit forecasts for 2021 have risen considerably since the company reported late last week. Some on the Street are questioning, however, if those expectations have now gotten too high.
"It was hard to find a clear negative in the quarter with significant QTD out performance vs. expectations, impressive margin performance, and an arguably conservative guide for 2Q; however, we are concerned for exactly how high investor expectations settle," said Wells Fargo restaurant analyst Jon Tower. "While cheaper than most peers, we continue to believe that absent a long-term unit growth strategy for the U.S. business, this discount will remain in place despite the march toward peer-average EBIT margins."
Tower rates Bloomin' Brands an Equal-weight with a $37.00 price target.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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