The market expects Red Robin (RRGB) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended June 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the ...

I updated the reverse DCF model to show what markets are now pricing in for the stock. With the lower stock price, a more modest sales recovery is expected with some elevation in 2025 and 2026. The EBIT margin is expected to rise into 3.0%, down from the previous 4.0% estimate. The margin leverage still estimates very good improvements. The cash flow conversion should still be good with capital expenditures largely being put on halt. Red Robin's Bleak Q1 Financials Takeaway Red Robin Gourmet Burgers, Inc. ( ...

Core Viewpoint - Red Robin's first-quarter fiscal 2024 results showed earnings and revenues falling short of the Zacks Consensus Estimate, marking the second consecutive quarter of earnings misses [1][7]. Financial Performance - The company reported an adjusted loss per share of $0.80, which was wider than the consensus estimate of a loss of $0.41, compared to an adjusted loss of $0.25 in the prior-year quarter [7]. - Quarterly revenues totaled $388.5 million, missing the consensus mark of $397 million and representing a 7% year-over-year decrease, primarily due to poor restaurant revenues [16]. - The restaurant-level operating profit margin was 11%, down from 14.7% in the prior-year quarter [3]. - Adjusted EBITDA for the quarter was $12.2 million, significantly lower than $35.9 million in the prior-year quarter [10]. - Comparable restaurant revenues fell by 6.5% year over year, with guest traffic declining by 9.4%, although this was partially offset by a 2.9% increase in guest checks due to a 5.4% rise in menu prices [8]. Balance Sheet and Debt - As of April 21, 2024, Red Robin had cash and cash equivalents of $30.6 million, up from $23.6 million as of December 31, 2023 [2]. - Long-term debt decreased to $162 million from $182.6 million in the prior-year quarter [2]. - Inventories were reported at $27.1 million, slightly up from $26.8 million in the previous quarter [2]. Strategic Initiatives - The recent launch of a new loyalty program is seen as a positive step in revitalizing the brand within the casual dining industry, with early progress encouraging the company [6]. Future Guidance - For fiscal 2024, the company maintains its revenue guidance in the range of $1.25 billion to $1.275 billion, with restaurant-level operating profit expected between 12.5% and 13.5% [19]. - Capital expenditures are anticipated to be between $25 million and $35 million, and adjusted EBITDA is expected to range from $60 million to $70 million [19]. Market Sentiment - There has been an upward trend in fresh estimates for the company, with a notable shift of 29.07% in consensus estimates [4][20]. - The stock has a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [23].

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Core Insights - Red Robin Gourmet Burgers, Inc. (RRGB) is positioned to benefit from its loyalty program and strategic initiatives, particularly through menu innovation and digital enhancements [1] - The company has seen a significant share price increase of 22.9% over the past three months, contrasting with a 4% decline in the Zacks Retail – Restaurants industry [2] - Earnings estimates for fiscal 2025 indicate a robust growth rate of 59.1% year-over-year [2] Growth Catalysts - The Red Robin Royalty Program is a key long-term growth driver, with membership nearing 14 million, and the company is enhancing its digital infrastructure to reach a broader audience [11] - The "Leave Room for Fun" campaign has successfully increased brand perception and intent to visit, with a 15-percentage point improvement in brand perception and a 6% increase in intent to visit [6] - Menu innovation remains a focus, with positive customer feedback on limited-time offers and a strategy to target a wider range of menu items beyond burgers [7][14] Strategic Initiatives - The company is optimizing guest engagement through improved marketing capabilities and targeted audience strategies, including a recent marketing test that showed a 200-basis point improvement in traffic [12][13] - Digital marketing efforts are being enhanced through platforms like Hulu and YouTube TV to improve performance and return on investment [13] - The reintroduction of popular menu items like the MadLove Burger and ribs aims to drive higher checks and margins [14] Financial Considerations - Despite growth initiatives, the company faces rising costs, with restaurant labor costs increasing 2.4% year-over-year to $149 million, impacting margins [15] - The anticipated inflation for fiscal 2024 is expected to normalize between 3% and 4% across various cost categories, including commodities and wages [8]

Red Robin Gourmet Burgers, Inc. (RRGB) 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 ...

Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) Q1 2024 Results Conference Call May 29, 2024 4:30 PM ET Company Participants G.J. Hart - President and Chief Executive Officer Todd Wilson - Chief Financial Officer Conference Call Participants Mark Smith - Lake Street Capital Alex Slagle - Jefferies Andrew Wolf - CL King CJ Dipollino - Craig-Hallum Capital Group Todd Brooks - The Benchmark Company Operator Good afternoon, everyone and welcome to the Red Robin Gourmet Burgers Incorporated First Quarter 2024 Earn ...

Shares of Red Robin have returned -9.4% over the past month versus the Zacks S&P 500 composite's +4.3% change. The stock currently has a Zacks Rank #5 (Strong Sell), indicating that it could underperform the broader market in the near term. Number of restaurants - Total: 505 versus the three-analyst average estimate of 507. Comparable restaurant revenue - YoY change: -6.5% versus the three-analyst average estimate of -5.6%. Number of restaurants - Franchised: 92 versus the two-analyst average estimate of 92 ...

Red Robin (RRGB) came out with a quarterly loss of $0.80 per share versus the Zacks Consensus Estimate of a loss of $0.41. This compares to earnings of $0.25 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of -95.12%. A quarter ago, it was expected that this casual restaurant chain would post a loss of $0.43 per share when it actually produced a loss of $0.66, delivering a surprise of -53.49%. Over the last four quarters, the c ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements (unaudited)](index=3&type=section&id=ITEM%201.%20Financial%20Statements%20(unaudited)) Unaudited statements show decreased assets, a widened stockholders' deficit, and a larger net loss despite positive operating cash flow Condensed Consolidated Balance Sheets | Balance Sheet Items (in thousands) | April 21, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $30,594 | $23,634 | | Total current assets | $93,268 | $91,781 | | Total assets | $717,086 | $741,934 | | **Liabilities & Stockholders' Equity (Deficit)** | | | | Total current liabilities | $197,643 | $186,337 | | Long-term debt | $161,961 | $182,594 | | Total liabilities | $746,187 | $762,376 | | Total stockholders' equity (deficit) | $(29,101) | $(20,442) | - Total assets decreased to **$717.1 million** while the total stockholders' deficit widened to **$(29.1) million**[10](index=10&type=chunk) Condensed Consolidated Statements of Operations and Comprehensive Loss | Income Statement Items (in thousands) | Q1 2024 (ended Apr 21) | Q1 2023 (ended Apr 16) | | :--- | :--- | :--- | | Total revenues | $388,541 | $417,812 | | Total costs and expenses | $390,652 | $413,631 | | Income (loss) from operations | $(2,111) | $4,181 | | Net loss | $(9,460) | $(3,256) | | Diluted loss per share | $(0.61) | $(0.20) | - Total revenues decreased to **$388.5 million** in Q1 2024, swinging from an operating income of **$4.2 million** to an operating loss of **$2.1 million**[13](index=13&type=chunk) - The total stockholders' deficit increased to **$(29.1) million** as of April 21, 2024, driven by a **$9.5 million** net loss during the quarter[17](index=17&type=chunk) Condensed Consolidated Statements of Cash Flows | Cash Flow Items (in thousands) | Q1 2024 (ended Apr 21) | Q1 2023 (ended Apr 16) | | :--- | :--- | :--- | | Net cash provided by operating activities | $13,734 | $17,342 | | Net cash provided by (used in) investing activities | $15,145 | $(16,084) | | Net cash used in financing activities | $(21,894) | $(1,017) | | Net change in cash, cash equivalents, and restricted cash | $6,987 | $240 | - Investing activities provided **$15.1 million** in cash, driven by a **$23.4 million** sale-leaseback transaction, while financing activities used **$21.9 million** for debt repayment[20](index=20&type=chunk) - As of April 21, 2024, the company operated **413 owned** and **92 franchised** restaurants[22](index=22&type=chunk) - A Q1 2024 sale-leaseback of ten properties generated net proceeds of **$23.4 million** and a net gain of **$7.4 million**[40](index=40&type=chunk) - Total term loan borrowings stood at **$167.9 million** as of April 21, 2024, with a variable interest rate of **11.59%**[42](index=42&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenues declined 7.0% due to a drop in guest count, while costs rose, leading to a lower Adjusted EBITDA and a wider net loss Highlights and Key Performance Indicators | Key Metrics | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenues | $388.5 million | $417.8 million | | Comparable Restaurant Revenue | -6.5% | N/A | | Net Loss | $9.5 million | $3.3 million | | Adjusted EBITDA | $12.2 million | $35.9 million | | Restaurant Level Operating Profit | $41.5 million (11.0%) | $60.0 million (14.7%) | - The company generated net proceeds of approximately **$23.4 million** from a sale-leaseback of ten restaurants[68](index=68&type=chunk) - A total of **$21.2 million** of debt was repaid during the first quarter of fiscal 2024[66](index=66&type=chunk) Results of Operations - **Revenues:** Restaurant revenue decreased by **7.0%** to **$378.6 million**, primarily due to a **6.5%** decrease in comparable restaurant revenue driven by a **9.4%** drop in Guest count[86](index=86&type=chunk) - **Cost of Sales:** Decreased by **70 basis points** to **23.8%** of restaurant revenue, driven by menu price increases and cost savings initiatives[89](index=89&type=chunk) - **Labor Costs:** Increased by **360 basis points** to **39.3%** of restaurant revenue due to investments in wages, benefits, and a new bonus plan[91](index=91&type=chunk) - **Selling, General, and Administrative (SG&A):** Increased by **$4.9 million (14.1%)**, primarily driven by a **$5.2 million** increase in selling costs[96](index=96&type=chunk)[98](index=98&type=chunk) Liquidity and Capital Resources - Total liquidity was approximately **$55.6 million** as of April 21, 2024, including **$25.0 million** available under its credit facility[103](index=103&type=chunk) - Net cash from operating activities decreased to **$13.7 million** from **$17.3 million** year-over-year, mainly due to lower profitability[104](index=104&type=chunk)[105](index=105&type=chunk) - Q1 2024 capital expenditures were significantly reduced to **$8.2 million** from **$16.1 million** in the prior year[107](index=107&type=chunk) - The company was in compliance with all debt covenants as of April 21, 2024[112](index=112&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks remain interest rate fluctuations on its variable-rate debt and commodity price volatility - A **1.0%** change in interest rates on its **$167.9 million** of variable-rate debt would impact annualized pre-tax interest expense by **$1.7 million**[125](index=125&type=chunk) - A **1.0%** increase in food and beverage costs would negatively impact the annual cost of sales by approximately **$2.9 million**[126](index=126&type=chunk) [Controls and Procedures](index=35&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the quarter-end[127](index=127&type=chunk) - No material changes to internal control over financial reporting occurred during the most recent fiscal quarter[128](index=128&type=chunk) [PART II - OTHER INFORMATION](index=36&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=36&type=section&id=ITEM%201.%20Legal%20Proceedings) The company faces routine litigation but believes existing reserves are adequate and outcomes will not be materially adverse - The company is subject to various claims and litigation arising in the normal course of business, including employment, guest, and commercial disputes[58](index=58&type=chunk) - As of April 21, 2024, the company maintained reserves of **$9.2 million** for loss contingencies, included within Accrued liabilities[59](index=59&type=chunk) [Risk Factors](index=36&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to the risk factors disclosed in the 2023 Annual Report on Form 10-K have occurred - No material changes have occurred to the risk factors disclosed in the Annual Report on Form 10-K for fiscal year 2023[133](index=133&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in any unregistered equity sales or share repurchases during the first quarter of fiscal 2024 - The company made no unregistered sales of equity securities and no share repurchases during the first quarter of fiscal 2024[134](index=134&type=chunk) [Other Information](index=37&type=section&id=ITEM%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the first quarter - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan during the first quarter of 2024[136](index=136&type=chunk) [Exhibits](index=38&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the report, including certifications and interactive data files - The exhibits filed with this Form 10-Q include CEO and CFO certifications under Rule 13a-14(a) and Section 1350, as well as financial statements formatted in XBRL[138](index=138&type=chunk)