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Red Robin (RRGB) Q2 Earnings Meet Estimates, Revenues Lag
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Red Robin Gourmet Burgers Inc. (RRGB - Free Report) reported mixed second-quarter 2018 results, wherein earnings came in line with the Zacks Consensus Estimate but revenues lagged the same. Following the quarterly results, the company’s shares declined 3.7% in after-hours trading. Also, in the past six months, the stock has lost 27.8% against the industry’s increase of 2.3%.
Earnings & Revenue Discussion
Red Robin’s adjusted earnings of 46 cents per share came in line with the consensus estimate. However, the bottom-line figure witnessed a sharp decline of 24.6%.
Revenues came in at $315.4 million, which lagged the consensus mark of $318 million and decreased 0.6% from the prior-year quarter. The downside was primarily due to weak restaurant revenues and soft comparable restaurant revenues.
Behind the Headline Numbers
Comps at company-owned restaurants were down 2.6% year over year compared with the prior-quarter comps decline of 0.9%. The downturn can be attributed to a 1.9% decline in average guest check and a 0.7% fall in guest counts.
Restaurant-level operating profit margin contracted 150 basis points (bps) to 19.3%. The decline was due to a 40-bps increase in cost of sales, a 90-bps rise in other restaurant operating expenses and a 50-bps surge in occupancy costs, partly offset by a 40-bps decrease in labor costs.
Adjusted earnings before interest, taxes, and amortization (EBITDA) decreased 10.8% to $28.8 million from $32.3 million in the year-ago quarter.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
As of Jul 15, 2018, Red Robin had cash and cash equivalents of $21.9 million compared with $17.7 million as of Dec 31, 2017. The company’s long-term debt amounted to $221.4 million as of Jul 15, 2018 compared with $266.4 million at the end of 2017.
2018 View
Red Robin updated its guidance for 2018. The company anticipates earnings to be $1.80-$2.20 per share, down sharply from the prior estimate of $2.40-$2.80. The Zacks Consensus Estimate for 2018 is currently pegged at $2.00.
Comparable-restaurant sales are expected to decline in the range of 1-2% compared with earlier estimate of 50-150 bps growth. Total revenues are envisioned to be between $1.350 billion and $1.365 billion.
Carrols Restaurant has an impressive long-term earnings growth rate of 20%.
Dine Brands Global reported better-than-expected earnings in the trailing four quarters, with an average beat of 8.1%.
Darden Restaurants delivered better-than-expected earnings in the preceding four quarters.
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It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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Red Robin (RRGB) Q2 Earnings Meet Estimates, Revenues Lag
Red Robin Gourmet Burgers Inc. (RRGB - Free Report) reported mixed second-quarter 2018 results, wherein earnings came in line with the Zacks Consensus Estimate but revenues lagged the same. Following the quarterly results, the company’s shares declined 3.7% in after-hours trading. Also, in the past six months, the stock has lost 27.8% against the industry’s increase of 2.3%.
Earnings & Revenue Discussion
Red Robin’s adjusted earnings of 46 cents per share came in line with the consensus estimate. However, the bottom-line figure witnessed a sharp decline of 24.6%.
Revenues came in at $315.4 million, which lagged the consensus mark of $318 million and decreased 0.6% from the prior-year quarter. The downside was primarily due to weak restaurant revenues and soft comparable restaurant revenues.
Behind the Headline Numbers
Comps at company-owned restaurants were down 2.6% year over year compared with the prior-quarter comps decline of 0.9%. The downturn can be attributed to a 1.9% decline in average guest check and a 0.7% fall in guest counts.
Restaurant-level operating profit margin contracted 150 basis points (bps) to 19.3%. The decline was due to a 40-bps increase in cost of sales, a 90-bps rise in other restaurant operating expenses and a 50-bps surge in occupancy costs, partly offset by a 40-bps decrease in labor costs.
Adjusted earnings before interest, taxes, and amortization (EBITDA) decreased 10.8% to $28.8 million from $32.3 million in the year-ago quarter.
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
Financial Highlights
As of Jul 15, 2018, Red Robin had cash and cash equivalents of $21.9 million compared with $17.7 million as of Dec 31, 2017. The company’s long-term debt amounted to $221.4 million as of Jul 15, 2018 compared with $266.4 million at the end of 2017.
2018 View
Red Robin updated its guidance for 2018. The company anticipates earnings to be $1.80-$2.20 per share, down sharply from the prior estimate of $2.40-$2.80. The Zacks Consensus Estimate for 2018 is currently pegged at $2.00.
Comparable-restaurant sales are expected to decline in the range of 1-2% compared with earlier estimate of 50-150 bps growth. Total revenues are envisioned to be between $1.350 billion and $1.365 billion.
Red Robin has a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Some better-ranked stocks in the same space are Carrols Restaurant Group, Inc. (TAST - Free Report) , Dine Brands Global, Inc. (DIN - Free Report) and Darden Restaurants, Inc. (DRI - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Carrols Restaurant has an impressive long-term earnings growth rate of 20%.
Dine Brands Global reported better-than-expected earnings in the trailing four quarters, with an average beat of 8.1%.
Darden Restaurants delivered better-than-expected earnings in the preceding four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >