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Red Robin (RRGB) Q1 Earnings and Revenues Lag Estimates
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Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported first-quarter fiscal 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. Earnings missed the consensus estimate for the second straight quarter.
Last week's launch of a new Red Robin loyalty program marked a successful step in the company’s strategy to revitalize the brand within the casual dining industry. The company is encouraged by the early progress and is confident that it has just begun tapping into its full potential.
Delving Deeper
In the fiscal first quarter, Red Robin recorded an adjusted loss per share of 80 cents, wider than the Zacks Consensus Estimate of a loss of 41 cents. The company had reported an adjusted loss per share of 25 cents in the prior-year quarter.
Quarterly revenues of $388.5 million missed the consensus mark of $397 million. The top line decreased 7% year over year. The decrease in revenues was primarily due to dismal restaurant revenues.
In the quarter under review, comparable restaurant revenues fell 6.5% year over year. This was caused by the shift away from deep discounting marketing promotions. Also, guest traffic declined 9.4% in the quarter. However, this was partially offset by a 2.9% rise in guest checks. The rise in guest checks was due to a 5.4% increase in menu prices. This was partially offset by a 1.8% decline in the menu mix. Per our model, comparable restaurant revenues were anticipated to decline 4.7% year over year.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
The restaurant-level operating profit margin was 11% in the fiscal first quarter (compared with 14.7% in the prior-year quarter). The figure compares to our projection of 12.4%.
In the fiscal first quarter, restaurant labor costs increased 2.4% year over year to $149 million. The figure compares to our projection of $146.3 million.
Other operating costs in the quarter declined 7.7% year over year to $66.5 million. The figure compares to our projection of $68.1 million.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) in the fiscal first quarter amounted to $12.2 million, compared with $35.9 million in the prior-year quarter. Our estimate for the metric was $23.3 million.
Other Financial Information
As of Apr 21, 2024, Red Robin had cash and cash equivalents of $30.6 million compared with $23.6 million as of Dec 31, 2023. Long-term debt, as of Apr 21, 2024, was $162 million compared with $182.6 million in the prior-year quarter. Inventories in the quarter were $27.1 million compared with $26.8 million in the previous quarter.
2024 Guidance
The company reiterated its fiscal 2024 guidance. For fiscal 2024, the company continues to expect total revenues in the range of $1.25-$1.275 billion. Restaurant-level operating profit is anticipated in the range of 12.5-13.5%. Capital expenditures are anticipated between $25 million and $35 million. In 2024, adjusted EBITDA is expected in the range of $60-$70 million.
Zacks Rank
Red Robin currently has a Zacks Rank #5 (Strong Sell).
Key Picks
Better-ranked stocks in the Zacks Retail-Wholesale sector include:
The Zacks Consensus Estimate for WING’s 2024 sales and earnings per share (EPS) suggests a rise of 27.5% and 36.7%, respectively, from the year-ago levels.
Brinker International, Inc. (EAT - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have risen 87.4% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5% and 39.2% growth, respectively, from the year-earlier actuals.
El Pollo Loco Holdings, Inc. (LOCO - Free Report) holds a Zacks Rank #2 at present. It has a trailing four-quarter earnings surprise of 19.4%, on average. LOCO’s shares have risen 14.3% in the past year.
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS indicates 3.8% and 9.4% growth, respectively, from the prior-year figures.
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Red Robin (RRGB) Q1 Earnings and Revenues Lag Estimates
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported first-quarter fiscal 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. Earnings missed the consensus estimate for the second straight quarter.
Last week's launch of a new Red Robin loyalty program marked a successful step in the company’s strategy to revitalize the brand within the casual dining industry. The company is encouraged by the early progress and is confident that it has just begun tapping into its full potential.
Delving Deeper
In the fiscal first quarter, Red Robin recorded an adjusted loss per share of 80 cents, wider than the Zacks Consensus Estimate of a loss of 41 cents. The company had reported an adjusted loss per share of 25 cents in the prior-year quarter.
Quarterly revenues of $388.5 million missed the consensus mark of $397 million. The top line decreased 7% year over year. The decrease in revenues was primarily due to dismal restaurant revenues.
In the quarter under review, comparable restaurant revenues fell 6.5% year over year. This was caused by the shift away from deep discounting marketing promotions. Also, guest traffic declined 9.4% in the quarter. However, this was partially offset by a 2.9% rise in guest checks. The rise in guest checks was due to a 5.4% increase in menu prices. This was partially offset by a 1.8% decline in the menu mix. Per our model, comparable restaurant revenues were anticipated to decline 4.7% year over year.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
Red Robin Gourmet Burgers, Inc. price-consensus-eps-surprise-chart | Red Robin Gourmet Burgers, Inc. Quote
Operating Results
The restaurant-level operating profit margin was 11% in the fiscal first quarter (compared with 14.7% in the prior-year quarter). The figure compares to our projection of 12.4%.
In the fiscal first quarter, restaurant labor costs increased 2.4% year over year to $149 million. The figure compares to our projection of $146.3 million.
Other operating costs in the quarter declined 7.7% year over year to $66.5 million. The figure compares to our projection of $68.1 million.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) in the fiscal first quarter amounted to $12.2 million, compared with $35.9 million in the prior-year quarter. Our estimate for the metric was $23.3 million.
Other Financial Information
As of Apr 21, 2024, Red Robin had cash and cash equivalents of $30.6 million compared with $23.6 million as of Dec 31, 2023. Long-term debt, as of Apr 21, 2024, was $162 million compared with $182.6 million in the prior-year quarter. Inventories in the quarter were $27.1 million compared with $26.8 million in the previous quarter.
2024 Guidance
The company reiterated its fiscal 2024 guidance. For fiscal 2024, the company continues to expect total revenues in the range of $1.25-$1.275 billion. Restaurant-level operating profit is anticipated in the range of 12.5-13.5%. Capital expenditures are anticipated between $25 million and $35 million. In 2024, adjusted EBITDA is expected in the range of $60-$70 million.
Zacks Rank
Red Robin currently has a Zacks Rank #5 (Strong Sell).
Key Picks
Better-ranked stocks in the Zacks Retail-Wholesale sector include:
Wingstop Inc. (WING - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. It has a trailing four-quarter negative earnings surprise of 21.4%, on average. The stock has surged 94.1% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WING’s 2024 sales and earnings per share (EPS) suggests a rise of 27.5% and 36.7%, respectively, from the year-ago levels.
Brinker International, Inc. (EAT - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have risen 87.4% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5% and 39.2% growth, respectively, from the year-earlier actuals.
El Pollo Loco Holdings, Inc. (LOCO - Free Report) holds a Zacks Rank #2 at present. It has a trailing four-quarter earnings surprise of 19.4%, on average. LOCO’s shares have risen 14.3% in the past year.
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS indicates 3.8% and 9.4% growth, respectively, from the prior-year figures.