To peek into the nature of Outback’s shifting business, the word “discount” was mentioned 18 times during Monday’s second-quarter conference call. In this case, it was used to illustrate how the iconic steakhouse has redirected a strategy once featured without pause in casual dining. Across Bloomin’ Brands’ portfolio, which includes Carrabba’s, Bonefish Grill, and Fleming’s, discounting dropped 19 percent this past quarter. It was cut nearly in half (down 44 percent) at Carrabba’s alone.

Meanwhile, Bloomin’ Brands also cut back its overall marketing spend—14 percent at Outback in Q2—and yet still drove same-store sales gains of 4 percent, with traffic up 0.6 percent, making it four consecutive quarters of positive traffic. When traffic improved a paltry 0.1 percent in Q3 of last year, it signaled the first quarter of improved traffic in over a year. The momentum has accelerated since, and was up 2.2 percent in Q1 following a heavy lift of 4.3 percent to end fiscal 2017. Naturally, these numbers are going to adjust as they lap one another on a quarter-to-quarter basis, but CEO Liz Smith said during a July 30 conference call that the overarching story tells a more valuable story, one that highlights Bloomin’s pivot to celebrate “the 360-degree experience” as opposed to trying to lure guests with coupons and price tags.

READ MORE: Can Outback get even better in 2018?

“Clearly, the investments in all of our growth levers are really working,” Smith said. “… Why we feel so good about it is—this is broad-based growth. So, certainly our investments in elevating the customer experience are working, and we are seeing that in customer satisfaction scores and traffic. We are also getting a strong payback on our CRM initiatives, data personalization, and then, the loyalty program, which is working really well at Outback and keeps building itself.”

Outback’s strategy essentially sums up like this: reallocate spending away from discounting and reinvest in the customer experience. Smith said they’ve poured resources into steak preparation and portion sizing, reducing complexity within restaurants, and improving ambiance through an ambitious remodel program.

Currently, the company is testing multiple design prototypes, and plans to start a rollout of the initiatives in the second half of the year, which Smith said should deliver about a 3 percent traffic lift consistent with prior interior remodels. Within the next three years, Outback plans to “substantially complete” the program. Fifty remodels are on deck for fiscal 2018. Additionally, the chain is relocating units “as quickly as quality sites become available,” Smith said. The relocation program—on track to move 14 restaurants this fiscal year—is generating a sales lift well in excess of 30 percent at completed units.

“What I’d tell you is that my confidence in Outback is very, very high. We are now in the position to monetize the investments we have made.” — Liz Smith, Bloomin’ Brands CEO.

On the overall development front, Outback is building a pipeline to add an additional 50 restaurants.

Returning to the discounting topic, Smith said the 19 percent collective decrease did impact traffic, particularly at the smaller Bonefish and Fleming’s brands. However, it also had a positive impact on profitability. The two chains, with 200 and 70 units, respectively (Outback has 738 and Carrabba’s 227), are on track to achieve record profits in 2018, Smith said.

The soft-discounting strategy, in some ways, resulted in average-check, per person, increases across the board (3.4 percent at Outback, 5.2 percent at Carrabba’s, 2.7 percent at Bonefish, and 8 percent at Fleming’s).

David Deno, chief financial officer, said it’s also, “part of our overall strategy to provide value for the customer, but at the same time drop our reliance on specific LTOs and coupons.”

“As the second half of the year unfolds, we will continue to wean promotional traffic from the base and replace it with more-sticky, high-value consumers,” Smith added. “We are confident this is the correct strategy to continue to build healthy traffic and grow margins.”

Same-store sales fell 0.6 percent at Carrabba’s in Q2, year-over-year, while Bonefish saw a 1.5 percent rise, and Fleming’s comps climbed 0.3 percent.

Bloomin’ is in the process of making changes across the portfolio. Carrabba’s doubled the available dollars for partners to engage in local marketing in their communities as the brand shifts marketing spend away from national TV and limited-time offers. Bonefish continued to push operators toward sourcing fresh fish specials on the local level, and moved marketing resources from national toward local programs, helping “define Bonefish as the unchain-chain, and is paying off in sales and profitability,” Smith said.

Fleming’s rolled out a new, simplified menu to improve consistency and execution and work on differentiating the brand from a traditional, high-end steakhouse to a localized menu selection and customer segmentation, Smith added.

Overall, Bloomin’s earnings per share of 38 cents beat Zacks Consensus Estimates of 30 cents. The company has beat Wall Street expectations three of the last four quarters on the metric, and posted revenues of $1.03 billion in Q2.

Same-store sales fell 0.6 percent at Carrabba’s in the second quarter.

Smith spoke at length about the effectiveness of Bloomin’s Dine Rewards program, which now sits 6.6 million-plus members strong. In terms of Bloomin’s “direct email marketing muscle,” as Smith called it, the company has grown its unique customer profile data base from 9 million in 2014 to 20 million this past quarter.

“And we know all about these customers—what they like and when they like it, and when they want to be served,” Smith said.

The program is, first and foremost, driving frequency. It’s also “cross-fertilizing” the company’s traffic. In other words, it is introducing Outback users to Bonefish; Bonefish to Fleming’s; and so on.

“That’s increasing the customer as well as driving the frequency. That’s growing pretty rapidly,” she said.

It’s also broadening Bloomin’ customers’ use of what Smith labeled “different revenue centers.” It’s a moniker she’s showcasing to explain the occasions available to guests—a concept that’s rapidly evolving and expanding.

“If you were a dine-in-only customer, we’re seeing you migrate now as well toward using us for delivery and off-premises, and that has multiple benefits in driving you up the life-time value model,” Smith said. “The good news is, we have a lot of opportunity in front of us now, since we’ve made the data investments; we’ve built the data cloud; we’ve built the integrated customer profile on all the actions. We’re in the position now to monetize … And we can use that data base now and are using it to provide the relevant message at the right time regarding the right channel to our customers.”

Outback’s off-premises business has been a steady indicator of this strength for some time now. Smith said it’s becoming increasingly evident that the potential for off-premises and delivery provides a large and incremental tailwind for casual dining. Bloomin’ recognized this and set targets for several metrics, including delivery time and deliveries per location, to make sure it wasn’t whiffing arguably the most promising opportunity to reach this side of the industry in recent memory.

She said the majority of Outback’s 240 restaurants offering delivery began to consistently hit those targets in Q2. As a result, the company felt confident to resume rollout of delivery to another 200 locations, a phase Smith said would be completed by year’s end. The company sees 25–30 percent of sales as a realistic off-premises goal. It’s currently about 12–13 percent.

There are also five express locations in tests, the limited-service model that combines Outback and Carrabba’s in a delivery and take-out only format. Another store is expected to open this year.

All of these changes have Outback firing on all cylinders, Smith said. And it’s something that needs to be looked at from a helicopter point of view, well above the quarter-stacked-on-quarter outlook often observed by investors.

“At some point, you’ve got to walk away from the year-over-year comparisons and just look holistically and say, ‘Is this business in a healthy, great place with unique proprietary level and firing on all cylinders? And do I believe this momentum can continue to despite a lapping of this or a lapping or that? … What I’d tell you is that my confidence in Outback is very, very high. We are now in the position to monetize the investments we have made.”