Red Robin Gourmet Burgers (RRGB) Q1 2025 Earnings Call May 29, 2025 04:30 PM ET Company Participants David Pace - President, CEO & DirectorG.J. Hart - Former CEOTodd Wilson - Executive VP & CFO Conference Call Participants Todd Brooks - Equity Research AnalystWill Forsberg - Associate AnalystAlexander Slagle - Stock AnalystMark Smith - Senior Research Analyst Operator Good afternoon, everyone, and welcome to the Red Robin Gourmet Burgers Incorporated First Quarter twenty twenty five Earnings Call. This conf ...

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]