Red Robin's (RRGB) Stock Down On Wider-Than-Expected Q3 Loss
Zacks Investment Research | Nov 05, 2019 10:25PM ET
Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) reported mixed fiscal third-quarter 2019 results, wherein the bottom line missed the Zacks Consensus Estimate but the top line surpassed the same. Following the quarterly results, shares of Red Robin decreased 5.9% in the after-hour trading session on Nov 5. However, shares of the company have gained 19.6% compared with the industry’s 15.1% rally so far this year.
It reported loss per share of 24 cents, wider than the Zacks Consensus Estimate of a loss of 22 cents. In the year-ago quarter, the company had reported adjusted earnings of 16 cents per share.
Revenue Discussion
Revenues came in at $294.2 million, beating the Zacks Consensus Estimate of $291 million but declining 0.2% from the prior-year quarter. The downside can be primarily attributed to a decline in restaurant as well as franchise royalties, fees, and other revenues.
Comparable restaurant revenues increased 1.6% year over year (on a constant-currency basis), driven by a 4.7% gain in average check, partially offset by a 3.1% decline in guest count. The increase in average guest check was on account of a 3.2% rise in menu mix and 1.5% hike in pricing.
Notably, the increase in menu mix was primarily due to its current menu and promotional strategy.
Operating Results
Restaurant-level operating profit margin contracted 70 basis points (bps) to 16.1%. The decline was due to a 90-bps rise in labor costs and 30-bps increase in other restaurant operating expenses. Cost of sales margin remained flat. Occupancy costs declined 60 bps owing to restaurant closures.
Adjusted earnings before interest, taxes, and amortization decreased to $14.7 million from $24.2 million a year ago.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
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