Red Robin Gourmet Burgers (RRGB)
Red Robin Gourmet Burgers Inc. (RRGB - Analyst Report) is vulnerable to economic headwinds, and we believe that the stock will continue to underperform the restaurant industry. Impeding the growth is its sagging same-store sales and declining traffic counts.
The company's second-quarter 2009 same-store sales fell 11.5%. The chain expects guest counts to remain negative, and expects restaurant-level operating margins to decline by 50 to 80 basis points in fiscal year 2009.
In addition, more than 50% of total restaurants are located in areas, which have been hit hard by the housing downturn and economic slowdown. This may dampen the company's growth potential.
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| Market Summary | Nov 22, 2009 15:48 pm ET |

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