Why Is Red Robin (RRGB) Down 9.8% Since Last Earnings Report?

Core Viewpoint - Red Robin's recent earnings report shows a mixed performance, with revenues declining year-over-year but exceeding estimates, while the stock has underperformed the S&P 500 over the past month [1][2]. Financial Performance - Red Robin reported Q3 2025 revenues of $265.1 million, a decrease of 3.5% from $274.6 million in the previous year, but above the Zacks Consensus Estimate of $263 million [2]. - The company posted an adjusted loss of 70 cents per share, which is better than the expected loss of 78 cents and an improvement from a loss of $1.03 per share in the same quarter last year [3]. - The net loss for the quarter was $18.4 million, slightly better than the $18.9 million loss reported in the previous year [3]. Margins & Profitability - Restaurant-level operating profit increased to $25.8 million from $24.2 million year-over-year, with the operating margin expanding by 90 basis points to 9.9% due to labor efficiency improvements [4]. - Adjusted EBITDA rose 81% year-over-year to $7.6 million, while the adjusted operating loss was $12.1 million, or negative 4.6% of revenues, compared to a loss of $12.9 million last year [4]. Balance Sheet & Liquidity - At the end of the quarter, Red Robin had cash and cash equivalents of $21.7 million and total liquidity of $50.7 million, including credit facility availability [5]. - Long-term debt decreased to $172.4 million from $181.6 million at the end of fiscal 2024 [5]. FY25 Outlook - For fiscal 2025, Red Robin anticipates revenues of approximately $1.2 billion and has reaffirmed a restaurant-level operating margin guidance of at least 12.5% [6]. - Adjusted EBITDA is projected to be at least $65 million, with comparable restaurant sales expected to decline by 4% for the remainder of the year [6]. Estimate Trends - Estimates for Red Robin have trended downward over the past month, indicating a negative shift in expectations [7][9]. VGM Scores - Red Robin has a Growth Score of B, a Momentum Score of D, and a Value Score of A, placing it in the top 20% for value investors, resulting in an aggregate VGM Score of A [8]. Industry Performance - Red Robin is part of the Zacks Retail - Restaurants industry, where Cheesecake Factory has seen a 3.5% gain over the past month, reporting revenues of $907.23 million, a year-over-year increase of 4.8% [10].