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Red Robin (RRGB) to Report Q1 Earnings: What's in the Cards?

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Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) is scheduled to report first-quarter fiscal 2021 results on May 25, after market close. In the last reported quarter, the company reported a negative earnings surprise of 38.8%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the company’s fiscal first-quarter bottom line is pegged at a loss of $1.27 per share. In the prior-year quarter, the company reported loss per share of $6.66.

For revenues, the consensus mark is pegged at $306 million, almost flat compared with prior-year quarter’s levels.

Let’s discuss the factors that are likely to get reflected in the quarter to be reported.

Red Robin Gourmet Burgers, Inc. Price and EPS Surprise

 

Red Robin Gourmet Burgers, Inc. Price and EPS Surprise

Red Robin Gourmet Burgers, Inc. price-eps-surprise | Red Robin Gourmet Burgers, Inc. Quote

 

Factors at Play

Red Robin's fiscal first-quarter performance is likely to have benefitted from higher average guest check, pent up demand for casual dining as well as recovery in Western markets. This along with focus on enterprise pricing, outdoor seating capacity expansions, restoration of full operating hours and Donatos expansion are likely to have driven the fiscal first-quarter top line.

Moreover, addition of new third-party delivery partners, website enhancements and new Red Robin mobile app are likely to have added to the upside. Notably, emphasis on cost-effective channels coupled with streamline ordering and improved operational execution are likely to have boosted higher-order conversion and increased guests frequency in the to-be-reported quarter.

However, costs pertaining to digital and restaurant maintenance, Donatos expansion and off-premise execution enhancements are likely to have hurt margins in the fiscal first quarter. This along with dismal footfall on account of the pandemic is likely to have affected the company’s performance in the to-be-reported quarter.

What Our Model Says

Our proven model does not predict an earnings beat for Red Robin this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

Earnings ESP: Red Robin has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Yum! Brands, Inc. (YUM - Free Report) reported strong first-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The metrics increased year over year. The company’s adjusted earnings of $1.07 beat the Zacks Consensus Estimate of 85 cents. In the prior-year quarter, the company had reported adjusted earnings of 64 cents. Quarterly revenues of $1,486 million surpassed the consensus estimate of $1,461 million. The top line also rose 17.7% year over year. The upside can be attributed to increase in sales along with rise in franchise and property revenues.

McDonald's Corporation (MCD - Free Report) reported first-quarter 2021 results, with earnings and revenues outpacing the Zacks Consensus Estimate. The company reported adjusted earnings of $1.92 per share, which surpassed the Zacks Consensus Estimate of $1.81. Moreover, the bottom line rallied 31% year over year. Quarterly revenues of $5,124.6 million beat the Zacks Consensus Estimate of $5,047 million. Moreover, the figure increased 9% year over year. The top line benefited from increase in global comparable sales.

Starbucks Corporation (SBUX - Free Report) reported second-quarter fiscal 2021 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The company reported adjusted earnings per share (EPS) of 62 cents, which beat the Zacks Consensus Estimate of 52 cents. In the prior-year quarter, the company had reported adjusted EPS of 32 cents. Meanwhile, quarterly revenues of $6,668 million missed the Zacks Consensus Estimate of $6,803 million. However, the top line increased 11.2% from the year-ago quarter’s levels. The uptick was driven by growth in comparable store sales, partially offset by the unfavorable impact of Global Coffee Alliance transition-related activities.

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