Core Insights - Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) has been facing significant financial challenges, with over six years of net losses impacting its balance sheet [1] Financial Performance - The company has experienced a continuous decline in profitability, leading to a weakened financial position [1] Investment Perspective - The current situation presents potential investment opportunities, but the ongoing losses and balance sheet erosion raise concerns about the company's future viability [1]

Group 1 - Red Robin Gourmet Burgers (RRGB) is undergoing efforts to turn the business around after experiencing turbulent years, leading to a buy rating in January 2024 [1] - The analysis is based on value investing principles, an owner's mindset, and a long-term investment horizon [1] - The analyst does not engage in writing sell articles or recommending shorting [1] Group 2 - There are no current stock, option, or derivative positions in any mentioned companies, nor plans to initiate such positions within the next 72 hours [2] - The article reflects the author's own opinions and is not influenced by compensation from any company [2] - Seeking Alpha emphasizes that past performance does not guarantee future results and that views expressed may not represent the platform as a whole [3]

Core Insights - Red Robin Gourmet Burgers, Inc. (RRGB) reported first-quarter fiscal 2025 results with earnings and revenues exceeding the Zacks Consensus Estimate, showing year-over-year growth in both metrics [1][5]. Financial Performance - Adjusted earnings per share (EPS) for the first quarter were 19 cents, surpassing the Zacks Consensus Estimate of a loss of 57 cents, compared to an adjusted loss of 73 cents in the same quarter last year [5]. - Quarterly revenues reached $392.4 million, exceeding the consensus mark of $387 million, reflecting a 1% increase year-over-year [5]. - Comparable restaurant revenues increased by 3.1% year-over-year, a significant improvement from the 6.5% decline reported in the prior-year quarter [5]. Operational Metrics - The restaurant-level operating profit margin was 14.3%, up from 11% in the prior-year quarter, exceeding the projected margin of 12.7% [6]. - Restaurant labor costs decreased to $143.1 million from $149 million in the prior-year quarter, while other operating costs slightly increased to $67.5 million from $66.5 million [6][7]. - Adjusted EBITDA for the quarter was $27.9 million, compared to $13.4 million in the prior-year quarter, surpassing the estimate of $23.2 million [7]. Financial Position - As of April 20, 2025, cash and cash equivalents were $24.2 million, down from $30.7 million as of December 29, 2024. Long-term debt decreased to $164.8 million from $181.6 million during the same period [8]. Future Guidance - For the second quarter of fiscal 2025, the company anticipates a decline of about 3% in comparable restaurant sales, influenced by a 240 basis point headwind from the non-recurrence of a 2024 benefit related to the loyalty program [9]. - Total revenues for fiscal year 2025 are now expected to range between $1.21 billion and $1.23 billion, slightly lower than the initial projection [10]. - Adjusted EBITDA for fiscal 2025 is anticipated to be between $60 million and $65 million, with capital expenditures estimated at approximately $30 million [10].

Core Viewpoint - Red Robin Gourmet Burgers has successfully turned a profit in Q1 of FY2025, marking its first quarterly profit since 2019, despite facing challenges such as tariff pressures and a downward revision of its revenue guidance for FY2025 [1][3]. Financial Performance - The company reported a GAAP net profit of $1.2 million in Q1 FY2025, a significant improvement from a net loss of $9.5 million in the same period last year [1][3]. - Adjusted EBITDA under NON-GAAP standards doubled compared to the previous year, reaching $27.9 million, up from $13.4 million [1]. - Total sales increased by 1% year-over-year to $392.35 million, exceeding market expectations [1]. Operational Insights - The company benefited from a 6.8% net menu price increase and significantly lower labor costs, which contributed to an adjusted earnings per share of $0.20, compared to a loss of $0.73 in the prior year [1]. - The management has revised its FY2025 revenue guidance down to a range of $1.21 billion to $1.23 billion, from a previous estimate of $1.225 billion to $1.25 billion [2]. Strategic Initiatives - Red Robin is focused on its "North Star" performance revival plan, which emphasizes ingredient upgrades, service experience, and cost control [2]. - The CEO, David Pace, highlighted the ongoing journey of brand revival and the significant market opportunities ahead [1].

Group 1 - Red Robin reported revenue of $392.35 million for the quarter ended March 2025, reflecting a 1% increase year-over-year and a surprise of +1.28% over the Zacks Consensus Estimate of $387.4 million [1] - The company's EPS for the quarter was $0.19, a significant improvement from -$0.80 in the same quarter last year, resulting in an EPS surprise of +133.33% compared to the consensus estimate of -$0.57 [1] - Over the past month, Red Robin's shares have returned +14.4%, outperforming the Zacks S&P 500 composite's +6.7% change, with a current Zacks Rank of 3 (Hold) [3] Group 2 - The total number of Red Robin restaurants is 491, slightly below the average estimate of 497 based on three analysts [4] - Comparable restaurant revenue showed a year-over-year change of 3.1%, matching the average estimate from three analysts [4] - Restaurant revenue was reported at $385.81 million, exceeding the three-analyst average estimate of $376.61 million, with a year-over-year change of +1.9% [4]

Core Viewpoint - Red Robin (RRGB) reported quarterly earnings of $0.19 per share, significantly beating the Zacks Consensus Estimate of a loss of $0.57 per share, and showing improvement from a loss of $0.80 per share a year ago [1] Financial Performance - The company posted revenues of $392.35 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.28% and showing an increase from $388.54 million year-over-year [2] - Over the last four quarters, Red Robin has exceeded consensus revenue estimates four times, but has only surpassed consensus EPS estimates once [2] Stock Performance - Red Robin shares have declined approximately 39.2% since the beginning of the year, contrasting with the S&P 500's slight gain of 0.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.29 on revenues of $291.24 million, and for the current fiscal year, it is -$1.88 on revenues of $1.23 billion [7] - The estimate revisions trend for Red Robin is mixed, and future changes in estimates will be closely monitored following the recent earnings report [6][7] Industry Context - The Retail - Restaurants industry, to which Red Robin belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Comparatively, Darden Restaurants (DRI), another player in the same industry, is expected to report quarterly earnings of $2.92 per share, reflecting a year-over-year increase of 10.2% [9]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $392.4 million, compared to $388.5 million in Q1 2024, reflecting an increase [11] - Comparable restaurant revenue increased by 3.1%, driven by a 6.8% increase in net menu price, despite a 3.5% decline in guest traffic [12] - Restaurant level operating profit as a percentage of restaurant revenue was 14.3%, an increase of 330 basis points compared to Q1 2024 [12] - Adjusted EBITDA was $27.9 million, an increase of $14.5 million versus Q1 2024, attributed to cost efficiency gains and menu price increases [13] - General and administrative costs rose to $27 million from $25.8 million in Q1 2024, while selling expenses decreased to $9.4 million from $13.5 million [13] Business Line Data and Key Metrics Changes - The revamped Red Robin Royalty program had approximately 15.3 million members at the end of Q1 2025, contributing to increased guest engagement [9] Market Data and Key Metrics Changes - The company anticipates annual comparable restaurant sales to remain generally unchanged at approximately 0% for 2025 [15] - Guest traffic trends are expected to continue at a decline of approximately 4% for the remainder of the year [34] Company Strategy and Development Direction - The company aims to maintain improvements in guest experience while implementing strategies for sustainable growth in restaurant traffic and profitability [20] - Key priorities include retaining operational execution, returning to sustainable traffic growth, strengthening financial position by reducing debt, and reinvesting in restaurant facilities [21][22] - The company is focused on enhancing marketing strategies to restore Red Robin as a preferred dining option [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's progress but acknowledged the need for further improvements in guest experience [19] - The company is cautious about the broader macro and consumer environment, which has led to a more conservative outlook for the remainder of the year [15][16] Other Important Information - The company ended Q1 2025 with $24.2 million in cash and cash equivalents, $9.1 million in restricted cash, and $35 million available under its revolving line of credit [14] - The company plans to refinance a term loan maturing in Q1 2027 and has made progress in reducing debt [14][76] Q&A Session Summary Question: Profitability in Q1 and guidance for the year - Management noted that efficiency gains in labor contributed significantly to Q1 profitability, despite anticipated pressure from tariffs and traffic declines [30][32] Question: Menu price contribution and expectations for the rest of the year - Management expects menu price contribution to decline throughout the year, with projected check growth of about 4% in Q2 and Q3, and 2% in Q4 [37] Question: Loyalty program performance and future opportunities - Management indicated that the loyalty program is performing well, with significant opportunities for further growth and engagement [39][40] Question: Traffic trends and promotional performance - Management confirmed that traffic trends are consistent with previous expectations, and the Hot Honey promotion exceeded expectations [46][48] Question: Restaurant closures and timing - The company expects to close 10 to 15 restaurants throughout the year, with closures spread evenly over the remaining months [49] Question: Selling expenses and media spend outlook - Management expects selling expenses to remain around $30 million for the year, with some variability quarter to quarter [71]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $392.4 million, an increase from $388.5 million in Q1 2024, primarily driven by a 3.1% increase in comparable restaurant revenue and a 6.8% increase in net menu price, despite a 3.5% decline in guest traffic [10][11] - Adjusted EBITDA for Q1 2025 was $27.9 million, an increase of $14.5 million compared to Q1 2024, attributed to cost efficiency gains and menu price increases [12] - Restaurant level operating profit as a percentage of restaurant revenue was 14.3%, an increase of 330 basis points compared to the same quarter last year [11] Business Line Data and Key Metrics Changes - The revamped Red Robin Royalty program had approximately 15.3 million members at the end of Q1 2025, contributing to increased guest engagement and frequency of visits [8] - The company has focused on operational efficiency through its managing partner program, which incentivizes restaurant leaders to achieve strong financial results [7] Market Data and Key Metrics Changes - The company anticipates comparable restaurant sales to remain generally unchanged at approximately 0% for the year, with expectations of a decline of about 3% in Q2 2025 due to headwinds from the loyalty program changes [14][16] - Guest traffic was down 3.5% in Q1 2025, with expectations of a continued decline of approximately 4% for the remainder of the year [32][34] Company Strategy and Development Direction - The company aims to strengthen its financial position by reducing debt and increasing free cash flow generation, allowing for greater flexibility in investment opportunities [22] - Key priorities for 2025 include retaining operational improvements, returning to sustainable traffic growth, and reinvesting in restaurant facilities and atmosphere [19][20] - The company is focused on enhancing guest engagement and marketing strategies to restore Red Robin as a preferred dining option [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's progress but acknowledged the need for continued improvement in guest experience and traffic growth [18][19] - The broader macroeconomic environment and consumer trends have led to a more cautious outlook for the remainder of the year, prompting a reduction in revenue guidance [14][15] Other Important Information - The company ended Q1 2025 with $24.2 million in cash and cash equivalents, $9.1 million in restricted cash, and $35 million available under its revolving line of credit [13] - The company plans to close 10 to 15 restaurants by the end of the year, with closures expected to be evenly spread throughout the year [48] Q&A Session Summary Question: Profitability in Q1 and maintaining guidance - Management noted that efficiency gains in labor contributed significantly to Q1 profitability, despite anticipated pressure from tariffs and traffic declines [30][31] Question: Menu price contribution throughout the year - Management expects menu price contribution to decline throughout the year, projecting about 4% check growth in Q2, 4% in Q3, and 2% in Q4 [35] Question: Loyalty program effectiveness - Management confirmed that the loyalty program is performing well, with significant opportunities for further growth and engagement [39] Question: Traffic trends and promotions - Management indicated that traffic trends are consistent with previous expectations, and the Hot Honey promotion has exceeded expectations [46][47] Question: Selling expenses and media spend outlook - Management expects selling expenses to remain around $30 million for the year, with some variability quarter to quarter [68] Question: Refinancing debt outlook - Management is optimistic about refinancing opportunities following strong Q1 results, but no specific timeline was provided [72][73]

Financial Performance - Total revenues for the first quarter of fiscal 2025 were $392.4 million, an increase of $3.8 million compared to the same period last year[75]. - Net income for the first quarter was $1.2 million, a significant improvement from a net loss of $9.5 million in the prior year, representing a $10.7 million increase[75]. - Adjusted EBITDA rose to $27.9 million, reflecting a 108.2% increase from $13.4 million in the same quarter last year[75]. - Restaurant revenue rose by 1.9% to $385.8 million in Q1 fiscal 2025 from $378.6 million in Q1 fiscal 2024, with total restaurant operating costs decreasing by 1.9%[98]. - Restaurant level operating profit increased by 32.5% to $55.0 million in Q1 fiscal 2025, with a margin of 14.3% compared to 11.0% in Q1 fiscal 2024[102]. - Net income for Q1 fiscal 2025 was $1.25 million, a significant improvement from a net loss of $9.46 million in Q1 fiscal 2024[99]. - Adjusted EBITDA for Q1 fiscal 2025 was $27.9 million, up from $13.4 million in Q1 fiscal 2024[100]. Revenue Sources - Comparable restaurant revenue increased by 3.1%, with a total increase of $11.5 million, while non-comparable and closed restaurant revenue decreased by $4.3 million[74][75]. - Franchise revenue decreased by 16.0% to $4.5 million, primarily due to reduced franchisee contributions for marketing programs[84]. Cost Management - Labor costs as a percentage of restaurant revenue decreased to 37.1%, down from 39.3% in the same quarter last year, indicating improved efficiency[88]. - Cost of sales as a percentage of restaurant revenue decreased by 1.0% to 22.8%, driven by menu price increases and vendor contributions[86]. - Selling expenses decreased by 30.8% to $9.4 million in Q1 fiscal 2025 from $13.5 million in Q1 fiscal 2024, representing 2.4% of total revenues[95]. Cash Flow and Liquidity - Cash and cash equivalents decreased by $6.1 million to $33.3 million as of April 20, 2025, with total liquidity of approximately $59.2 million[103]. - Net cash provided by operating activities increased by $5.8 million to $19.6 million in Q1 fiscal 2025 compared to $13.7 million in Q1 fiscal 2024[105]. - Capital expenditures totaled $11.97 million in Q1 fiscal 2025, up from $8.25 million in Q1 fiscal 2024[107]. - Net cash flows used in financing activities decreased to $19.3 million in Q1 fiscal 2025 from $21.9 million in Q1 fiscal 2024[108]. Debt and Financing - As of April 20, 2025, the Company had outstanding borrowings of $164.8 million under the Credit Facility, with $35.0 million of available borrowing capacity[113]. - The Second Amendment to the Credit Agreement increased aggregate revolving commitments by $15.0 million to $40.0 million through the third quarter of 2025[111]. - The Company is subject to customary covenants under its Credit Facility, including a net total leverage ratio covenant, and was in compliance as of April 20, 2025[114]. - A 1.0% change in the effective interest rate on $171.7 million of borrowings would result in a pre-tax interest expense fluctuation of $1.7 million annually[124]. - Interest expense increased by $0.6 million to $8.1 million in Q1 fiscal 2025, with a weighted average interest rate of 14.1% compared to 13.2% in Q1 fiscal 2024[96]. Shareholder Actions - The Company has repurchased a total of 1,088,588 shares at an average price of $15.18 per share for an aggregate amount of $16.52 million since the share repurchase program began[116]. Operational Changes - The total number of restaurants decreased from 505 to 491, with 401 company-owned and 90 franchised locations as of April 20, 2025[76][77]. - Average weekly net sales volumes in company-owned restaurants increased by 4.1% to $59,483 compared to $57,139 in the prior year[82]. Risk Management - The Company continues to monitor interest rate risk and may use interest rate swaps to manage exposure to interest rate changes[125]. - A 1.0% increase in food and beverage costs would negatively impact cost of sales by approximately $2.9 million on an annualized basis[126]. Seasonal Trends - The business is subject to seasonal fluctuations, with historically higher sales during spring, summer, and winter holiday seasons[117]. Accounting and Compliance - The Company has no significant changes in critical accounting estimates since the last Annual Report[119]. - The Company operates with a working capital deficit, utilizing operating cash flows to fund capital expenditures and debt repayment[115].

Exhibit 99.1 Red Robin Gourmet Burgers, Inc. Reports Results for the Fiscal First Quarter Ended April 20, 2025 Englewood, CO – May 29, 2025 – Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) ("Red Robin" or the "Company"), a full-service restaurant chain serving an innovative selection of high-quality gourmet burgers in a family-friendly atmosphere, today reported financial results for the fiscal first quarter ended April 20, 2025. Highlights for the Fiscal First Quarter of 2025, Compared to the Fiscal First ...