Sales at casual dining restaurants may be on the mend, but the sector's upturn wasn't enough for Outback Steakhouse owner Bloomin' Brands.
"We have seen some strengthening of casual dining sales trends over the past two quarters since a significant pullback of the industry in Q4 2016," Elizabeth Smith, CEO of Bloomin' Brands, said during an earnings conference call Wednesday.
"We have also seen improvement in key indicators such as employment, confidence and wage growth that suggests the state of the consumer is better. While this improvement is positive, we've yet to see a meaningful change in measured casual dining restaurant industry traffic," she said.
Smith pointed to increases in new restaurant openings and the growing trend of diners eating at home as major factors contributing to the slowing industry traffic.
Earlier, the company, which also owns Bonefish Grill, Carrabba's Italian Grill, and Fleming's Prime Steakhouse and Wine Bar, reported soft same-store sales and lackluster earnings, which send shares of the company plummeting as much as 8 percent.
While earnings were in line with Wall Street's estimates, revenue fell short.
Bloomin' Brands reported second-quarter adjusted earnings of 28 cents per share on revenue of $1.03 billion. Analysts had expected earnings of 28 cents per share on revenue of $1.04 billion, according to Thomson Reuters estimates.
During the quarter, Bloomin' Brands pulled back on its discounts and instead invested that money into improving the customer experience at its restaurants and its loyalty program, hoping that would bring in diners.
"We believe our investment priorities are appropriately in line with this landscape," Smith said. "It is more important than ever to elevate the 360 degree experience in our restaurant to provide differentiated dining occasions. And that effort is well underway and gaining traction."
While Carrabba's posted its highest same-store sales growth in eight quarters, and rose higher than analysts' forecasts, the rest of Bloomin' Brand's chains posted weaker-than-expected same-store sales.