Outback Steakhouse is getting a reality check. Its parent company, Bloomin’ Brands (NASDAQ: BLMN), abruptly shut down 21 restaurants in October as part of a sweeping effort to turn the brand around after several sluggish years.
The closures were disclosed in Bloomin’ Brands’ latest earnings report. The company also said 22 additional restaurants across its portfolio—which includes Carrabba’s Italian Grill and Bonefish Grill—will not have their leases renewed and are scheduled to close over the next four years.
Executives declined to specify exactly how many of the shuttered locations were Outback Steakhouse restaurants, but the chain’s website now lists about 670 U.S. locations, down roughly 10 percent from its peak of 750 a decade ago.
To fund the restructuring, Bloomin’ Brands recorded a $33 million impairment charge and suspended its shareholder dividend. The company’s stock has fallen about 40 percent year-to-date, reflecting investor uncertainty over whether its plan can reignite growth.
Inside the Turnaround Plan
Bloomin’ Brands is investing $75 million over the next three years in what CEO Mike Spanos calls a “comprehensive turnaround strategy.” The focus: simplify operations, improve steak quality, and make the dining experience feel more premium.
The plan includes:
- Menu improvements. Outback will highlight new cuts of steak and upgraded grilling techniques to differentiate from lower-priced competitors.
- Better service. Waiters will now handle four tables instead of six during busy hours to improve speed and attention.
- Restaurant renovations. Every Outback location will be remodeled by the end of 2028, featuring brighter interiors, redesigned bars, smaller kitchens, and expanded pickup areas to support to-go orders.
- Simplified operations. The company plans to streamline its menu, improve productivity, and focus marketing around its identity as a serious steakhouse rather than a general casual-dining chain.
Spanos told analysts, “Outback Steakhouse has incredible brand equity. It is the pioneer of the casual steakhouse industry. We have strong brand awareness and a tremendous opportunity to convert that awareness into restaurant visits.”
He added, “We face several critical challenges, including overly complex menus, unclear brand positioning, inconsistent guest experiences, a gap in steak quality, and diminishing value perception.”
Falling Behind Rivals
While Outback’s sales finally ticked up this quarter—same-store sales rose just 0.4 percent—its growth remains far behind key rivals.
LongHorn Steakhouse, owned by Darden Restaurants, reported a 5.5 percent increase in comparable sales in its most recent quarter. Texas Roadhouse posted a 5.8 percent rise over the same period.
Consumers are being choosier with dining budgets and are favoring brands they perceive as delivering stronger value. That dynamic has boosted chains such as Texas Roadhouse, Chili’s, and Applebee’s, which have leaned into value-driven promotions and generous portion sizes.
Outback, by contrast, has struggled to convince diners that it offers the same bang for their buck. Even with its iconic Bloomin’ Onion and Aussie-inspired menu, many guests view its prices as creeping higher than comparable steakhouses.
What’s at Stake
For investors, the Outback Steakhouse turnaround is more than a restaurant story—it’s a high-stakes bet on whether legacy casual-dining brands can adapt to a new era of consumer behavior.
Risks:
- The company must spend heavily on remodels and marketing while dealing with slowing traffic.
- Its suspended dividend may discourage income-focused investors.
- Execution missteps could further erode market share if remodels or menu changes fail to resonate.
Opportunities:
- Outback’s strong brand recognition still gives it a powerful foundation to rebuild.
- Streamlining its footprint—closing underperforming stores and reinvesting in the best locations—could strengthen profitability.
- An improved guest experience, paired with higher-quality food, could eventually bring lapsed diners back.
The Road Ahead
Every remaining Outback Steakhouse is expected to undergo renovation by 2028, signaling that the company isn’t abandoning the brand—it’s doubling down. But the payoff will take time.
The restaurant industry is shifting fast, and consumers are rewarding value, consistency, and experience. Whether Outback can reclaim its spot as America’s favorite casual steakhouse will depend on how effectively Bloomin’ Brands executes this reset.
For now, the steakhouse that helped define casual dining in the 1990s is fighting to prove it still belongs at the table.
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