Carrabba’s Italian Grill Overview
Like Outback Steakhouse, Carrabba’s Italian Grill is also a full-service casual restaurant, but it primarily serves Italian cuisine. The menu includes appetizers—soups and salads—chicken, beef, and pork entrées, seafood, pastas, and pizza. Carrabba’s also offers a fewer-than-600-calories and gluten-free menu. As of fiscal 2014, there were a total 243 Carrabba’s restaurant units out of the total 1,490 restaurants in the Bloomin’ Brands system. Of these Carrabba’s locations, 242 were company-owned and one was franchised.
Carrabba’s contributed about 17%—$710 million—of Bloomin’ Brands’ (BLMN) revenue in fiscal 2014, making it the second-most-important brand for the company. The brand’s average check per person for 2014 was $21. About 84% of this spending was for food and non-alcoholic beverages, while the remaining 16% was for alcoholic beverages.
Same-store sales continue to disappoint
Same-store sales declined -1%, from -0.2% over the last 12 months, and the company opened six new restaurants in 2014. Carrabba’s competes with several standalone Italian restaurants, along with names such as Darden’s Olive Garden and Maggiano’s Little Italy, both under the umbrella of Brinker International (EAT).
Peer Olive Garden has a similar story
Darden Restaurant’s (DRI) Olive Garden, which offers a similar menu, recorded a same-store sales decline of 3.4%. There were 837 Olive Garden restaurants in 2014. DRI is part of the Consumer Discretionary Select SPDR ETF (XLY), which holds about 0.3% of the stock in its portfolio. XLY includes restaurants such as McDonald’s (MCD) and Chipotle Mexican Grill (CMG) as well.
To tackle this disappointing same-store sales growth, Bloomin’ Brands has taken a few initiatives. These tactics include menu enhancement in the second half of 2015, continued restaurant remodeling (with 79 locations complete so far), and attracting customers through marketing programs.
We’ll continue our discussion with Bloomin’ Brands’ Bonefish restaurant concept in the next part of this series.