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Red Robin (RRGB) Down 1% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Red Robin (RRGB - Free Report) . Shares have lost about 1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Red Robin due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Red Robin's Q1 Earnings Lag Estimates
Red Robin reported first-quarter 2019 results, wherein earnings missed the Zacks Consensus Estimate but revenues came almost in line with the same. However, both the metrics declined on a year-over-year basis. Notably, the quarterly results were hurt by declining traffic numbers.
Earnings & Revenue Discussion
Red Robin’s adjusted earnings of 19 cents per share missed the consensus estimate of 48 cents. The bottom line also declined 72.5% from the year-ago quarter number.
Revenues came in at $409.87 million, almost in line with the consensus mark of $409.9 million but declined 2.8% from the prior-year quarter. The downside can be primarily attributed to soft comparable restaurant revenues due to decline in dine-in traffic.
Additionally, comparable restaurant revenues decreased 3.3% year over year due to a 5.5% decline in guest count, which overshadowed a 2.2% gain in average check. The increase in average guest check was on account of a 0.3% rise in menu mix and 1.9% hike in pricing.
Operating Results
Restaurant-level operating profit margin contracted 170 basis points (bps) to 18.3%. The decline was due to a 60-bps rise in other restaurant operating expenses and 30-bps increase in occupancy costs. However, cost of sales margin declined 40 bps due to decrease in waste and lower Tavern mix. Also, labor costs margin increased 120 basis points due to higher average wage rates and sales deleverage.
Adjusted earnings before interest, taxes, and amortization (EBITDA) decreased to $34.3 million from $42.4 million a year ago.
Financial Highlights
As of Apr 21, 2019, Red Robin had cash and cash equivalents of $23 million compared with $18.6 million as of Dec 30, 2018. The company’s long-term debt amounted to $183.4 million as of Apr 21, 2019, compared with $193.4 million as of Dec 30, 2018.
As of Apr 21, 2019, Red Robin had outstanding borrowings under its credit facility of $182.5 million in addition to amounts issued under letters of credit of $7.4 million.
Guidance
For 2019, Red Robin expects earnings of $1.14-$1.77 per share compared with $1.30-$1.70 projected earlier. The Zacks Consensus Estimate for the same is currently pegged at $1.23. Comparable restaurant revenue growth is expected to be down 1% to up 1% compared with prior guided range of flat to up 1%.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months.
VGM Scores
Currently, Red Robin has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Red Robin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Red Robin (RRGB) Down 1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Red Robin (RRGB - Free Report) . Shares have lost about 1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Red Robin due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Red Robin's Q1 Earnings Lag Estimates
Red Robin reported first-quarter 2019 results, wherein earnings missed the Zacks Consensus Estimate but revenues came almost in line with the same. However, both the metrics declined on a year-over-year basis. Notably, the quarterly results were hurt by declining traffic numbers.
Earnings & Revenue Discussion
Red Robin’s adjusted earnings of 19 cents per share missed the consensus estimate of 48 cents. The bottom line also declined 72.5% from the year-ago quarter number.
Revenues came in at $409.87 million, almost in line with the consensus mark of $409.9 million but declined 2.8% from the prior-year quarter. The downside can be primarily attributed to soft comparable restaurant revenues due to decline in dine-in traffic.
Additionally, comparable restaurant revenues decreased 3.3% year over year due to a 5.5% decline in guest count, which overshadowed a 2.2% gain in average check. The increase in average guest check was on account of a 0.3% rise in menu mix and 1.9% hike in pricing.
Operating Results
Restaurant-level operating profit margin contracted 170 basis points (bps) to 18.3%. The decline was due to a 60-bps rise in other restaurant operating expenses and 30-bps increase in occupancy costs. However, cost of sales margin declined 40 bps due to decrease in waste and lower Tavern mix. Also, labor costs margin increased 120 basis points due to higher average wage rates and sales deleverage.
Adjusted earnings before interest, taxes, and amortization (EBITDA) decreased to $34.3 million from $42.4 million a year ago.
Financial Highlights
As of Apr 21, 2019, Red Robin had cash and cash equivalents of $23 million compared with $18.6 million as of Dec 30, 2018. The company’s long-term debt amounted to $183.4 million as of Apr 21, 2019, compared with $193.4 million as of Dec 30, 2018.
As of Apr 21, 2019, Red Robin had outstanding borrowings under its credit facility of $182.5 million in addition to amounts issued under letters of credit of $7.4 million.
Guidance
For 2019, Red Robin expects earnings of $1.14-$1.77 per share compared with $1.30-$1.70 projected earlier. The Zacks Consensus Estimate for the same is currently pegged at $1.23. Comparable restaurant revenue growth is expected to be down 1% to up 1% compared with prior guided range of flat to up 1%.
How Have Estimates Been Moving Since Then?
Fresh estimates followed an upward path over the past two months.
VGM Scores
Currently, Red Robin has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Red Robin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.