Why same-store sales growth is down for Bloomin’ Brands
A must-read 2Q14 earnings overview of Bloomin' Brands (Part 2 of 13)
A critical revenue driver
In the last article we discussed the earnings per share of Bloomin’ Brands (BLMN), which declined significantly year-over-year (or YoY). Now let’s look at what caused this drop by first understanding how an important metric for the company, same-store sales and unit growth, performed.
Overall same-store sales declined to 0.6% from 2% year-over-year. Traffic and ticket, or average check, drive same-store sales. Market Realist’s series on Starbucks (SBUX) and Tim Hortons (THI) explain this metric in more detail.
Outback Steakhouse
Outback Steakhouse is the largest brand under Bloomin’ Brands in terms of revenue. The chain serves wood-fire grilled steaks, chicken, seafood, salads, pasta, and other items. Longhorn Steakhouse, under the umbrella of Darden Restaurants (DRI), offers a similar menu.
Same-store sales grew 0.9% compared to a growth of 2.8% in the corresponding quarter ended June 30, 2013. Darden Restaurants’ (DRI) Longhorn Steakhouse, which is similar to Outback Steakhouse, had a same-store sales growth of 2.8% compared to a growth of 3.2% a year ago.
Carrabba’s Italian Grill
Carrabba’s is the second largest brand in terms of revenue for Bloomin’ Brands. The restaurant serves wood-fired pizza, pasta, seafood, chicken, and other items. The menu is similar to Olive Garden under the umbrella of the Darden Restaurants (DRI).
Same-store sales were negative at -1.2% compared to a growth of 0.3% in the corresponding quarter ended June 30, 2013. Brinker International’s (EAT) Maggiano’s Little Italy, had a same-store sales growth of 0.9% compared to a growth of 0.2% over the same period.
ETF Vanguard Total Stock Market (VTI), which includes The Cheesecake Factory (CAKE) and Brinker International (EAT), provides investors with a wide exposure to the restaurant industry.
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