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Why Bloomin’ Brands is Focusing on Bonefish Grill

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Bonefish Grill

Bonefish Grill is a full-service casual dining restaurant primarily serving seafood. The menu includes soups and salads, wood-grilled fish, steaks and chops, and desserts. The company calls Bonefish an upscale casual dining restaurant serving “market fresh grilled fish,” and it also serves seasonal seafood, along freshly prepared sauces.

As of fiscal year 2014, there were a total of 206 Bonefish Grill restaurants, of which 201 were company-owned and five were franchised.

Bonefish Grill is the third most important brand for Bloomin’ Brands (BLMN), contributing 14% of the company’s revenue. The brand’s average check for fiscal 2014 was $24, of which food and non-alcoholic beverages contributed 77%, while non-alcoholic beverages contributed 23%.

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Same-store sales growth

Same-store sales growth, which was flat last year, grew 0.5% over the last 12 months and the company had 12 new restaurants during 2014. Bonefish Grill is the main focus of Bloomin’s management in terms of unit growth, as it plans to add over 300 new Bonefish restaurants over the next five years. According to the company filings, most of the restaurants are in the eastern and southern US. We’ll discuss unit growth in more detail later in this series.

Bonefish competes with several other casual-dining restaurants, such as Bahama Breeze and Eddie V’s under the umbrella of Darden Restaurants (DRI), The Cheesecake Factory (CAKE), and DineEquity (DIN). The Consumer Discretionary Select SPDR (XLY) invests about 10% of its portfolio in restaurant stocks, including some of these restaurants.

During fiscal 2014, the company purchased all partnership interest in Bonefish Grill for $17.2 million, becoming the brand’s complete owner. In the next part of this series, we’ll discuss Bloomin’ Brands’ upscale casual restaurant, Fleming’s.

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