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What's in Store for Red Robin's (RRGB) This Earnings Season?
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Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) is scheduled to report second-quarter 2018 results on Aug 21, after market close. In the first quarter of 2018, the company’s earnings missed the Zacks Consensus Estimate by 6.8%.
Q2 Expectations
The question lingering in investors’ minds now is whether Red Robin will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for second-quarter earnings is pegged at 46 cents, lower than 61 cents in the year-ago quarter. In the past 30 days, the company’s earnings estimates have witnessed sharp downward revisions of 32.4%. In the last reported quarter, Red Robin’s earnings declined 22.5% on a year-over-year basis.
Meanwhile, the Zacks Consensus Estimate for revenues stands at nearly $318.4 million, reflecting an increase of 0.8% from the prior-year actual figure.
Let’s delve deeper to find out how the company’s top and bottom line will shape up this earnings season.
Factors at Play
Red Robin, which has released its second-quarter 2018 preliminary numbers, stated that the company is disappointed with its results. Decline in guest count, higher food costs and other operating expenses negatively impacted the company’s performance. Per Red Robin’s preliminary results, comparable restaurant revenues declined 2.6% and comparable guest count fell 0.7%.
Additionally, Red Robin is investing heavily in several sales building initiatives like advertising and technical upgrades, which should result in elevated costs. Meanwhile, remodeling and restaurant maintenance are adding to the already rising expenses. In the first quarter of 2018, restaurant-level operating profit margin contracted 130 basis points (bps) to 20%. The downturn was due to a 90-bps increase in the cost of sales, 70-bps rise in other restaurant operating expenses and 40-bps surge in occupancy costs.
Nevertheless, the company is expanding its off-premise online-ordering business via carry-out, delivery and catering besides focusing on unit expansion to boost traffic. In fact, the increasing demand for off-premise orders is already reflecting in its business as they ring in at a higher total check. In the first quarter of 2018, the company delivered 9.4% mix in off-premise, up 40% year over year.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
Our proven model does not conclusively show that Red Robin is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.
Red Robin has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell), which makes the surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
As it is, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Peer Releases
McDonald's (MCD - Free Report) reported impressive second-quarter 2018 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings of $1.99 per share exceeded the consensus mark of $1.92 by 3.6% and increased 15% from the year-ago quarter (12% in constant currencies).
Darden (DRI - Free Report) posted better-than-expected results in fourth-quarter fiscal 2018. Adjusted earnings of $1.39 per share outpaced the consensus estimate of $1.35 by 3%. The bottom line also increased 17.8% year over year on the back of higher revenues.
Chipotle (CMG - Free Report) reported better-than-expected results for the second quarter of 2018. Adjusted earnings of $2.87 per share topped the Zacks Consensus Estimate of $2.78 by 3.2%. The bottom line also grew 23.7% from the year-ago quarter number backed by increased revenues and lower food costs.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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What's in Store for Red Robin's (RRGB) This Earnings Season?
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) is scheduled to report second-quarter 2018 results on Aug 21, after market close. In the first quarter of 2018, the company’s earnings missed the Zacks Consensus Estimate by 6.8%.
Q2 Expectations
The question lingering in investors’ minds now is whether Red Robin will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for second-quarter earnings is pegged at 46 cents, lower than 61 cents in the year-ago quarter. In the past 30 days, the company’s earnings estimates have witnessed sharp downward revisions of 32.4%. In the last reported quarter, Red Robin’s earnings declined 22.5% on a year-over-year basis.
Meanwhile, the Zacks Consensus Estimate for revenues stands at nearly $318.4 million, reflecting an increase of 0.8% from the prior-year actual figure.
Let’s delve deeper to find out how the company’s top and bottom line will shape up this earnings season.
Factors at Play
Red Robin, which has released its second-quarter 2018 preliminary numbers, stated that the company is disappointed with its results. Decline in guest count, higher food costs and other operating expenses negatively impacted the company’s performance. Per Red Robin’s preliminary results, comparable restaurant revenues declined 2.6% and comparable guest count fell 0.7%.
Additionally, Red Robin is investing heavily in several sales building initiatives like advertising and technical upgrades, which should result in elevated costs. Meanwhile, remodeling and restaurant maintenance are adding to the already rising expenses. In the first quarter of 2018, restaurant-level operating profit margin contracted 130 basis points (bps) to 20%. The downturn was due to a 90-bps increase in the cost of sales, 70-bps rise in other restaurant operating expenses and 40-bps surge in occupancy costs.
Nevertheless, the company is expanding its off-premise online-ordering business via carry-out, delivery and catering besides focusing on unit expansion to boost traffic. In fact, the increasing demand for off-premise orders is already reflecting in its business as they ring in at a higher total check. In the first quarter of 2018, the company delivered 9.4% mix in off-premise, up 40% year over year.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise | Red Robin Gourmet Burgers, Inc. Quote
What Does the Zacks Model Says?
Our proven model does not conclusively show that Red Robin is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.
Red Robin has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell), which makes the surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
As it is, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Peer Releases
McDonald's (MCD - Free Report) reported impressive second-quarter 2018 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings of $1.99 per share exceeded the consensus mark of $1.92 by 3.6% and increased 15% from the year-ago quarter (12% in constant currencies).
Darden (DRI - Free Report) posted better-than-expected results in fourth-quarter fiscal 2018. Adjusted earnings of $1.39 per share outpaced the consensus estimate of $1.35 by 3%. The bottom line also increased 17.8% year over year on the back of higher revenues.
Chipotle (CMG - Free Report) reported better-than-expected results for the second quarter of 2018. Adjusted earnings of $2.87 per share topped the Zacks Consensus Estimate of $2.78 by 3.2%. The bottom line also grew 23.7% from the year-ago quarter number backed by increased revenues and lower food costs.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>