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Bear of the Day: Red Robin Gourmet Burgers (RRGB)

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Red Robin Gourmet Burgers ((RRGB - Free Report) ) is a full-service casual dining restaurant chain serving an assorted range of its namesake.

Founded in 1969 in Seattle, with a 2002 IPO, Red Robin operates, franchises, and develops over 500 full-service restaurants in North America. The company also runs limited-service, non-traditional prototype restaurants named Red Robin's Burger Works.

After reporting mixed results for their Q4 earnings in late February, the stock slipped to new 52-week lows. It also fell into the cellar of the Zacks Rank as analysts moved to lower their EPS forecasts based on company guidance.

Analysts Wait for the Money

The 2024 EPS consensus dropped 90% from a loss of 78-cents to -$1.48. This represents a 2.8% annual loss over 2023's -$1.44.

The topline will also be 2-4% lighter based on company guidance of a range of $1.25-$1.28 billion.

Before the pandemic shutdown, Red Robin boasted a TTM profit peak of $1.81 per share in June 2019. But since the recession trough, the company has struggled to get back to profitability.

And any hopes of that were dashed last month with analysts taking the 2025 consensus down from a projection of a 33-cent profit to a loss of 57-cents.

Competition is Ravenous

As an anecdote that may or may not be useful, I frequent a metropolitan area with a 100,000+ population and it has a Red Robin full-service restaurant. But I've never been there.

Meanwhile, this area is growing so fast that it keeps attracting new full and quick-service eateries at a road runner clip. Just last month, I tried two of them with my kids because they'd never been to a Taco John's or a Cane's Chicken Fingers.

Dad just wanted to go to the new Buona, Chicago's "Original Italian Beef." And I found it delicious, but as with prices everywhere, expensive.

I also decided after writing this that I'm going to take them to Red Robin next time just to taste what's going on.

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