The CEO of Bloomin' Brands, the parent company of restaurant chains such as Outback Steakhouse and Bonefish Grill, told CNBC on Friday that it is not experiencing rising food costs, rather that beef and seafood costs have "been an opportunity" during the pandemic.
"There was some concern about the supply chain. That did not materialize like we expected," Dave Deno said on "Closing Bell." "We're finding that beef costs, seafood costs are actually coming down and something that we can take advantage of."
The coronavirus pandemic has caused significant economic disruption, particularly for the food industry, as many restaurants and bars had to stop in-person dining and pieces of the supply chain were fractured. Some chains, such as Wendy's, temporarily experienced beef shortages at certain stores. Others, such as Shake Shack, said profits were being dented by rising beef costs.
Chipotle also said rising costs of some ingredients contributed to higher food expenses in its most recent quarter. But Chief Financial Officer John Hartung said on Chipotle's earnings call Wednesday that the spike in beef prices it experienced has improved since its apex in mid-May.
Shares of Bloomin' Brands closed higher by 7.43% on Friday to $11.56 each. The company reported second-quarter revenues of $578.5 million before Friday's bell, down about 43% from the same period a year ago. Comparable same-store sales across its portfolio were down 39.4% in the quarter.
However, a loss of 74 cents per share was better than the loss of $1.12 that Wall Street had expected. Additionally, the Tampa-based company said recent spikes in Covid-19 cases in Florida and Texas have so far had limited impact on sales trends. "So that's been very heartening," Deno said.
Consumer spending at restaurants as they have reopened has been strong, with the average bill being "about the same as normal," he said.
"In our delivery and carryout business it's a little bit less, since we don't sell alcohol in delivered format," he said. "In our restaurants, the guest check has stayed the same. ... In fact, what we're seeing is consumers picking more indulgent, higher-cut steaks when they order."