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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 2022 results on May 26, after market close. In the last reported quarter, the company reported a negative earnings surprise of 80.7%.

The Trend in Estimate Revision

The Zacks Consensus Estimate for the fiscal first-quarter bottom line is pegged at a loss of 68 cents per share, indicating a deterioration of 126.7% from a loss of 30 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at $379.2 million. The projection suggests an increase of 16.2% from the year-ago quarter’s reported figure.

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

 

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

Factors at Play

Red Robin's fiscal first-quarter performance is likely to have benefited from pent-up demand, solid off-premise sales, Donatos expansion and new product offerings (Cheesy Bacon Fondue Burger and Scorpion Gourmet Burger). This and the easing of restrictions and improved dine-in sales are likely to have boosted the top line in the to-be-reported quarter.

Increased focus on the digital platform is likely to have aided the company’s performance in the fiscal first quarter. During the previous quarter, the company made solid progress in its digital space regarding a new loyalty platform, two new mobile apps (in iOS and Android platforms) and a new website. The company initiated enhancements in communication capabilities (through segmentation and personalized messaging based upon purchase history) covering Red Robin Royalty. Also, it announced the integration of the mobile apps with its newly-enhanced Royalty platform. Given the emphasis on tailored messaging (in a cost-effective manner) and solid customer engagement, the initiatives are likely to have boosted higher-order conversion and increased guest frequency in the to-be-reported quarter.

However, coronavirus-induced labor shortages and supply chain challenges are likely to have dented the company’s performance in the fiscal first quarter. Also, rising consumer inflation levels are likely to have affected margins 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.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Retail-Wholesale sector that investors may consider, as our model shows that these also have the right combination of elements to post an earnings beat:

Designer Brands Inc. (DBI - Free Report) has an Earnings ESP of +4.35% and a Zacks Rank #2.

Shares of Designer Brands have declined 23.2% in the past year. DBI’s earnings topped the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 112.8%, on average.

Casey's General Stores, Inc. (CASY - Free Report) has an Earnings ESP of +7.07% and a Zacks Rank #3.

Shares of Casey's have declined 9.5% in the past year. CASY’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 21.6%.

AutoZone, Inc. (AZO - Free Report) has an Earnings ESP of +2.54% and a Zacks Rank #3.

Shares of AutoZone have gained 22.3% in the past year. AZO’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 25.9%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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