Outback Steakhouse Owner Swings to a Loss

The operator of Outback Steakhouse, Bloomin' Brands Inc., swung to a loss and said revenue declined in the latest quarter as the restaurant's domestic locations battled weak sales in the U.S.

Shares dropped 7.1% in early trading to $17.60. Including that decline, the stock is down 21% in the past 12 months.

"Second-quarter performance for our brands and the industry was softer than expected," said Chief Executive Liz Smith. Ms. Smith said the company had made plans to do things to optimize its portfolio, including actions such as selling Outback South Korea, and investing ahead of international growth.

Bloomin', which operates restaurant brands such as Carrabba's Italian Grill and Bonefish Grill in addition to Outback Steakhouse, said its top-line results were hampered by a 2.3% fall in comparable restaurant sales at the company's U.S. restaurants and unfavorable currency rates.

Among all of its brands, domestic comparable sales fell 2.5% at Outback, 4.8% at Carrabba's, rose 0.9% at Bonefish Grill, and fell 0.8% at Fleming's Prime Steakhouse and Wine Bar.

International comparable restaurant sales at Outback Steakhouse Brazil and Outback Steakhouse South Korea rose 3.9% and 10.8%, respectively. The company sold Outback South Korea for about $50 million in cash on July 25; South Korean locations will be operated as franchises.

In July, Bloomin' said it had made plans to expand internationally into the Middle East over the next 5 years with 26 Outback Steakhouse and Abbraccio restaurants.

Bloomin' now expects full-year adjusted earnings-per share of at least $1.35; in April it had estimated earnings of $1.40. Analysts polled by Thomson Reuters expect $1.37 in per-share earnings for 2016.

For the quarter ended June 26, Bloomin' posted a loss of $9.2 million, or an 8-cent loss per share, a decline from last year's profit of $32.2 million, or 26 cents a share. Adjusted, the most recent quarter's earnings were 30 cents on a per-share basis, up from 28 cents a year ago.

Revenue fell 1.9% to $1.08 billion.

Analysts polled by Thomson Reuters had forecast 29 cents in per-share earnings on revenue of $1.09 billion.

Write to Brittney Laryea at brittney.laryea@wsj.com

(END) Dow Jones Newswires

July 29, 2016 11:05 ET (15:05 GMT)

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