[Red Robin Gourmet Burgers, Inc. Announces "First Choice" Plan and Updated Q2 Outlook](index=1&type=section&id=Red%20Robin%20Gourmet%20Burgers%2C%20Inc.%20Announces%20%22First%20Choice%22%20Plan%20and%20Updated%20Q2%20Outlook) The company announces its "First Choice" strategic plan and provides an updated financial outlook for Q2 2025 [Introduction and "First Choice" Plan Overview](index=1&type=section&id=Introduction%20and%20%22First%20Choice%22%20Plan%20Overview) The company introduces its "First Choice" plan to drive long-term value through strategic initiatives - The "First Choice" plan is an integrated strategy to make Red Robin the top choice for guests, team members, and investors[3](index=3&type=chunk) - The plan aims to generate resources to strengthen the balance sheet, fund marketing and technology investments, and consistently deliver value and a great guest experience[3](index=3&type=chunk) - The expected outcomes are **sustainable guest count growth, increased profitability, and generation of free cash flow**[3](index=3&type=chunk) [Core Components of the "First Choice" Plan](index=1&type=section&id=Core%20Components%20of%20the%20%22First%20Choice%22%20Plan) The plan is built on five pillars: operations, traffic, cost management, restaurant upgrades, and culture - **Hold Serve:** Maintain operational efficiencies, food quality, and expense management established under the North Star Plan[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) - **Drive Traffic:** Implement a new marketing plan to inspire new and returning guests and deliver consistent value[7](index=7&type=chunk)[11](index=11&type=chunk) - **Find Money:** Reduce system-wide expenses, tactically refranchise select restaurants, and lower debt to fund key initiatives[8](index=8&type=chunk)[11](index=11&type=chunk) - **Fix Restaurants:** Address deferred maintenance, improve guest-facing surroundings, and invest in new technology[9](index=9&type=chunk)[11](index=11&type=chunk) - **Win Together:** Cultivate a guest-centric, high-performance culture that attracts, retains, and develops top industry talent[9](index=9&type=chunk)[11](index=11&type=chunk) [Updated Second Quarter 2025 Financial Outlook](index=2&type=section&id=Updated%20Second%20Quarter%202025%20Financial%20Outlook) The company updates its Q2 2025 outlook, forecasting lower sales but higher Adjusted EBITDA Q2 2025 Financial Outlook Update | Metric | Previous Outlook | Updated Outlook | | :--- | :--- | :--- | | Comparable Restaurant Sales | Decrease of ~3% | Decrease of ~4% | | Adjusted EBITDA | $13M - $16M | > $16M | - **Profitability improvements in the first half of 2025 have already surpassed the full-year 2024 results**, driven by operational excellence and cost-saving initiatives[12](index=12&type=chunk) - The improved financial position will enable accelerated investments in initiatives aimed at driving guest traffic[12](index=12&type=chunk) [Investor Conference Call and Webcast](index=3&type=section&id=Investor%20Conference%20Call%20and%20Webcast) An investor call is scheduled for July 15th to discuss the new plan and updated financial outlook - An investor conference call is scheduled for **July 15th at 8:30 a.m. ET** to discuss the new strategic plan and financial expectations[13](index=13&type=chunk) - A replay of the call will be available by phone until Tuesday, July 22, 2025, and the webcast will be archived on the company's investor relations website[14](index=14&type=chunk)[15](index=15&type=chunk) [About Red Robin Gourmet Burgers, Inc.](index=3&type=section&id=About%20Red%20Robin%20Gourmet%20Burgers%2C%20Inc.) The company is a casual dining chain with nearly 500 locations known for its gourmet burgers - Red Robin is a casual dining chain with **nearly 500 restaurants** in the U.S. and Canada, operating under both company-owned and franchise models[16](index=16&type=chunk) - The menu features a wide array of burgers, appetizers, entrees, and desserts, with Donatos® pizza available at some locations[16](index=16&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to significant risks and uncertainties - The document contains forward-looking statements concerning the "First Choice" plan and financial outlook, which are **not guarantees of future performance**[17](index=17&type=chunk) - A wide range of risks could impact actual results, including the ability to implement the plan, economic conditions, competition, capital availability, IT system failures, and supply chain disruptions[18](index=18&type=chunk)

Core Viewpoint - Red Robin Gourmet Burgers, Inc. has announced its "First Choice" plan aimed at enhancing long-term shareholder value and provided an updated financial outlook for the second quarter of fiscal 2025 [1][2]. Group 1: First Choice Plan - The "First Choice" plan is designed to make Red Robin the preferred choice for guests, team members, and investors through coordinated initiatives [2][3]. - Key components of the plan include protecting the foundations of the previous North Star Plan, driving traffic through creative engagement, managing expenses to reduce debt, investing in restaurant facilities, and fostering a high-performance work environment [3][4]. Group 2: Financial Outlook - The company expects second quarter comparable restaurant sales to decrease by approximately 4%, slightly worse than the previous expectation of a 3% decrease [5]. - Adjusted EBITDA is anticipated to exceed prior expectations of $13 million to $16 million, indicating improved profitability [5][6]. - The first half of 2025 is projected to show Adjusted EBITDA surpassing the full-year results of 2024, reflecting operational excellence and cost efficiency [6]. Group 3: Investor Communication - An investor conference call is scheduled for July 15, 2025, to discuss the "First Choice" plan and updated financial expectations [7]. - The call will be accessible via phone and will also be webcast live, with a replay available shortly after the call [8].

Core Viewpoint - Red Robin (RRGB) has shown an 8.1% increase in stock price over the past four weeks, with a mean price target of $9.38 indicating a potential upside of 49.1% from the current price of $6.29 [1] Price Targets and Analyst Estimates - The mean estimate consists of four short-term price targets with a standard deviation of $3.94, where the lowest estimate is $3.50 (44.4% decline) and the highest is $12.00 (90.8% increase) [2] - A low standard deviation among price targets suggests a high degree of agreement among analysts regarding the stock's price movement [9] Earnings Estimates and Analyst Sentiment - Analysts have shown increasing optimism about RRGB's earnings prospects, as indicated by a positive trend in earnings estimate revisions [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 14.5%, with one estimate moving higher and no negative revisions [12] - RRGB holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] Conclusion on Price Targets - While the consensus price target may not be a reliable indicator of the stock's potential gain, it does provide a directional guide for price movement [14]

Group 1 - Red Robin (RRGB) closed at $5.00, with a 57.7% gain over the past four weeks, and a mean price target of $9.38 suggests an 87.6% upside potential [1] - The average price targets range from a low of $3.50 to a high of $12.00, with a standard deviation of $3.94, indicating variability in analyst estimates [2] - Analysts show a consensus that RRGB will report better earnings than previously estimated, which supports the potential for stock upside [4][11] Group 2 - The Zacks Consensus Estimate for RRGB has increased by 7.6% due to one upward revision in earnings estimates over the last 30 days [12] - RRGB holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13] - While the consensus price target may not be a reliable indicator of the extent of gains, it does provide a directional guide for price movement [14]

Group 1 - Momentum investing is characterized by the strategy of "buying high and selling higher," contrasting with traditional methods of "buying low and selling high" [1] - Identifying the right entry point for momentum stocks can be challenging, as they may lose momentum if their valuations exceed future growth potential [1] - A safer investment approach involves targeting bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score [2] Group 2 - Red Robin (RRGB) has shown significant price movement, with a 57.7% increase over the past four weeks, indicating strong investor interest [3] - RRGB has also gained 40.5% over the past 12 weeks, demonstrating its ability to maintain momentum over a longer period [4] - The stock has a beta of 2.39, suggesting it moves 139% more than the market, indicating fast-paced momentum [4] Group 3 - RRGB holds a Momentum Score of B, suggesting it is an opportune time to invest in the stock to capitalize on its momentum [5] - The stock has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [6] - RRGB is currently trading at a Price-to-Sales ratio of 0.07, indicating it is undervalued at 7 cents for each dollar of sales [6] Group 4 - RRGB appears to have significant potential for further price appreciation, supported by its fast-paced momentum characteristics [7] - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [7] - Zacks offers over 45 Premium Screens tailored to different investing styles, providing various strategies to identify winning stocks [8]

Company Overview - Red Robin Gourmet Burgers, Inc. is a casual dining restaurant chain founded in 1969, operating under the trade name Red Robin Gourmet Burgers and Brews [2] - The company serves a variety of gourmet burgers, salads, appetizers, entrees, desserts, signature beverages, and Donatos® pizza at select locations [2] - Red Robin operates nearly 500 locations in the United States and Canada, including those under franchise agreements [2] Recent Developments - The company will host meetings with institutional investors at the 15th Annual Jefferies Consumer Conference on June 17-18, 2025, in Nantucket, MA [1]

Core Viewpoint - Red Robin Gourmet Burgers experienced a significant stock surge of nearly 100% in a single day following the release of its first-quarter 2025 earnings, indicating investor enthusiasm for the company's ongoing turnaround efforts [1][2]. Financial Performance - The company reported a net income of $1.2 million, or $0.07 per diluted share, with adjusted earnings per share (EPS) reaching $0.19, surpassing analyst expectations of a loss of approximately $0.57 [4]. - Total revenues increased to $392.4 million, up $3.8 million from the same quarter last year [4]. - Comparable restaurant revenue grew by 3.1%, driven by a 6.8% rise in net menu prices [4]. - Adjusted EBITDA more than doubled to $27.9 million, marking a 108.2% increase from the previous year [4]. - The Restaurant Level Operating Profit margin improved to 14.3% from 11.0% in the first quarter of 2024 [4]. Strategic Developments - David Pace was appointed as President and CEO in April 2025, bringing continuity to the company's turnaround plan [5]. - The new CEO has outlined four main strategic goals focused on improving operations, increasing customer visits, strengthening finances, and upgrading restaurant environments [6][10]. - A significant marketing effort aims to address declining guest visits, with 22% of customer visits in Q1 coming from lapsed customers returning to the brand [8][9]. Market Outlook - Analysts have set a 12-month stock price forecast of $13.38, indicating a potential upside of 105.77% from the current price of $6.50 [7]. - The average analyst rating for Red Robin is a Buy, suggesting confidence in the company's growth potential [9].

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].