Bloomin’ Brands (NASDAQ: BLMN), parent company to Outback Steakhouse, shares fell 11% Tuesday morning. The fall comes after the company announced it is anticipating USD170 Million in costs within 2022 amid inflation.
The company reported earnings of USD0.57 per share, compared to the expected USD0.55 a share. Revenue amounted to $1.01 Billion, lower than analysts anticipated USD1.04 Billion.
“Q3 represented another quarter of strong results with significant sales, margin and earnings growth,” said David Deno, Chief Executive Officer. “This performance is a result of the great work by our employees in the restaurants and the restaurant support center. Recently, we have seen inflationary pressures in our business and have levers available to combat these headwinds and achieve our margin targets. We remain confident in our strategy and are well-positioned to deliver our long-term goals of growing healthy sales, optimizing margins, and increasing cash flow.”
To make up for increasing costs, customers are set to be charged more for their meals. Bloomin’ Brands expects to raise menu prices by 3% within November. Though executives will be keeping tabs on inflation to determine whether or not prices need to be adjusted further.
“Importantly, we haven’t taken price since 2019,” CFO Chris Meyer told analysts. “And so I’m not saying that we’ve got all kinds of headroom, and opportunity to take price, but we certainly are in a good position in the industry on the pricing front.”
Moreover, the company has decided to reduce promotions as a means of retaining a profit. Nevertheless, it is lowering prices in some instances as an incentive for customers to spend more overall.
Bloomin’s stock has surged 4% throughout the year and has a current market value of USD1.8 Billion.