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Red Robin (RRGB) Q1 Earnings Beat Estimates, Increase Y/Y
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Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported first-quarter fiscal 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Moreover, the top and the bottom line increased on a year-over-year basis. Following the results, shares of the company moved up 3.4% during after-hours trading session on May 25.
The company reported adjusted loss per share of 30 cents in the quarter under review, narrower than the Zacks Consensus Estimate of a loss of $1.24. In the year-ago quarter, the company had reported adjusted loss of $6.66.
Revenue Discussion
Quarterly revenues of $326.3 million beat the consensus mark of $309 million by 5.6%. Moreover, the top line increased 6.6% year over year. Notably, reopening of all indoor dining rooms coupled with pent-up demand for dining benefitted the company.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
During the quarter, comparable restaurant revenues increased 10% year over year. The upside was primarily driven by 4.4% rise in guest count and 5.6% increase in average guest check. Increase in average guest check can be attributed to 3.7% rise in pricing, 1.3% rise in menu mix and 0.6% rise from lower discounts. Menu mix, during the quarter, benefitted from higher sales of appetizers and Gourmet burgers, partially offset by lower beverage mix.
Operating Results
Restaurant-level operating profit margin came in at 15.7% for the fiscal first quarter compared with 8.8% in the year-ago quarter.
Restaurant labor costs (as a percentage of restaurant revenue) declined 430 basis points (bps) year over year to 35% in the fiscal first quarter. The downside was primarily caused by efficient management of labor structure, staffing shortages and simplifying menu that lead to reduced kitchen labor hours. However, this was partially offset by higher wage rates.
However, other operating costs increased 80 bps year over year to 18.1%. The upside was mainly owing to a rise in third party delivery commissions and supply costs owing to high off-premises sales.
Cost of sales declined 170 bps year over year to 21.7%. Occupancy costs declined 180 bps year over year to 9.4%. The decrease was primarily driven by savings from permanently closed restaurants, restructuring of lease payments and rent concessions.
Adjusted earnings before interest, taxes and amortization during the fiscal first quarter came in at $27.4 million against a loss of $10.7 million reported in the year-ago quarter.
Other Financial Information
As of Apr 18, 2021, the company had cash and cash equivalents of $22.3 million compared with $16.1 million at the end of Dec 27, 2020. Inventories during the quarter came in at $23.7 million compared with $23.8 million as of December-end. Long-term debt as of Apr 18, 2021 stood at $154.5 million compared with $161 million as on Dec 27, 2020.
Guidance
For 2021, the company expects capital expenditures in the range of $45-$55 million. Notably, this includes investments in regards to restaurants, infrastructure and systems capital maintenance, digital guest, operational technology solutions and off-premises execution enhancements.
Moreover, the company announced Donatos expansion to approximately 120 restaurants in 2021. The company anticipates to open approximately 40 restaurants in the fiscal second quarter and approximately 80 restaurants in the second half of fiscal 2021.
Meanwhile, effective tax rate for 2021 is anticipated between 1% and 5%.
Some other top-ranked stocks in the same space include Chuy's Holdings, Inc. (CHUY - Free Report) , Dine Brands Global, Inc. (DIN - Free Report) and Texas Roadhouse, Inc. (TXRH - Free Report) , each sporting a Zacks Rank #1.
Chuy's Holdings has a trailing four-quarter earnings surprise of 127.6%, on average.
Dine Brands 2021 earnings are expected to surge 268.7%.
Texas Roadhouse has a three-five year earnings per share growth rate of 10%.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
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Red Robin (RRGB) Q1 Earnings Beat Estimates, Increase Y/Y
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported first-quarter fiscal 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Moreover, the top and the bottom line increased on a year-over-year basis. Following the results, shares of the company moved up 3.4% during after-hours trading session on May 25.
The company reported adjusted loss per share of 30 cents in the quarter under review, narrower than the Zacks Consensus Estimate of a loss of $1.24. In the year-ago quarter, the company had reported adjusted loss of $6.66.
Revenue Discussion
Quarterly revenues of $326.3 million beat the consensus mark of $309 million by 5.6%. Moreover, the top line increased 6.6% year over year. Notably, reopening of all indoor dining rooms coupled with pent-up demand for dining benefitted the company.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
Red Robin Gourmet Burgers, Inc. price-consensus-eps-surprise-chart | Red Robin Gourmet Burgers, Inc. Quote
During the quarter, comparable restaurant revenues increased 10% year over year. The upside was primarily driven by 4.4% rise in guest count and 5.6% increase in average guest check. Increase in average guest check can be attributed to 3.7% rise in pricing, 1.3% rise in menu mix and 0.6% rise from lower discounts. Menu mix, during the quarter, benefitted from higher sales of appetizers and Gourmet burgers, partially offset by lower beverage mix.
Operating Results
Restaurant-level operating profit margin came in at 15.7% for the fiscal first quarter compared with 8.8% in the year-ago quarter.
Restaurant labor costs (as a percentage of restaurant revenue) declined 430 basis points (bps) year over year to 35% in the fiscal first quarter. The downside was primarily caused by efficient management of labor structure, staffing shortages and simplifying menu that lead to reduced kitchen labor hours. However, this was partially offset by higher wage rates.
However, other operating costs increased 80 bps year over year to 18.1%. The upside was mainly owing to a rise in third party delivery commissions and supply costs owing to high off-premises sales.
Cost of sales declined 170 bps year over year to 21.7%. Occupancy costs declined 180 bps year over year to 9.4%. The decrease was primarily driven by savings from permanently closed restaurants, restructuring of lease payments and rent concessions.
Adjusted earnings before interest, taxes and amortization during the fiscal first quarter came in at $27.4 million against a loss of $10.7 million reported in the year-ago quarter.
Other Financial Information
As of Apr 18, 2021, the company had cash and cash equivalents of $22.3 million compared with $16.1 million at the end of Dec 27, 2020. Inventories during the quarter came in at $23.7 million compared with $23.8 million as of December-end. Long-term debt as of Apr 18, 2021 stood at $154.5 million compared with $161 million as on Dec 27, 2020.
Guidance
For 2021, the company expects capital expenditures in the range of $45-$55 million. Notably, this includes investments in regards to restaurants, infrastructure and systems capital maintenance, digital guest, operational technology solutions and off-premises execution enhancements.
Moreover, the company announced Donatos expansion to approximately 120 restaurants in 2021. The company anticipates to open approximately 40 restaurants in the fiscal second quarter and approximately 80 restaurants in the second half of fiscal 2021.
Meanwhile, effective tax rate for 2021 is anticipated between 1% and 5%.
Zacks Rank & Key Picks
Red Robin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other top-ranked stocks in the same space include Chuy's Holdings, Inc. (CHUY - Free Report) , Dine Brands Global, Inc. (DIN - Free Report) and Texas Roadhouse, Inc. (TXRH - Free Report) , each sporting a Zacks Rank #1.
Chuy's Holdings has a trailing four-quarter earnings surprise of 127.6%, on average.
Dine Brands 2021 earnings are expected to surge 268.7%.
Texas Roadhouse has a three-five year earnings per share growth rate of 10%.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>