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Red Robin (RRGB) Q3 Earnings Beat, Adjusted EBITDA Up Y/Y
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Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported mixed third-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line improved on a year-over-year basis, but the bottom line declined.
Following the announcement, shares of the company dropped 1.5% during the after-hours trading session on Nov 1.
Delving Deeper
In the fiscal third quarter, Red Robin recorded an adjusted loss per share of 79 cents, surpassing the Zacks Consensus Estimate of a loss of 81 cents. The company reported an adjusted loss per share of $1.04 in the prior-year quarter.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $277.6 million missed the consensus mark of $278.3 million. The top line declined 3.2% year over year. The downside was primarily caused by a decline in comps.
During the quarter under review, comparable restaurant revenues fell 3.4% year over year. The downside can be attributed to the shift away from deep discounting marketing promotions and the elimination of virtual brands. Also, the Guest count declined 10.4% during the quarter. However, this was partially offset by a 7% rise in guest checks. The rise in guest checks can be attributed to a 7.7% increase in menu prices and a 2.1% increase in discounts. However, this was partially offset by a 2.8% decline in the menu mix. Per our model, comparable restaurant revenues were anticipated to decline 1.4% year over year.
Operating Results
The restaurant-level operating profit margin was 11.1% in the fiscal third quarter (compared with 12.6% reported in the prior-year quarter). The figure compares to our projection of 11.7%.
During the fiscal third quarter, restaurant labor costs increased 3.2% year over year to $103.7 million. The figure compares to our projection of $99.5 million. Restaurant labor costs (as a percentage of restaurant revenues) increased 240 basis points (bps) year over year to 38%.
Meanwhile, other operating costs during the quarter declined 4.7% year over year to $50.4 million. The figure compares to our projection of $52.8 million. Other operating costs (as a percentage of restaurant revenues) declined 30 bps year over year to 18.4%.
During the quarter under review, the cost of sales (as a percentage of restaurant revenues) fell 120 bps year over year to 23.8%. Occupancy costs (as a percentage of restaurant revenues) increased 50 bps year over year to 8.6%.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) during the fiscal third quarter amounted to $6.8 million (compared with $3.9 million reported in the prior year quarter). Our estimate for the metric was $9.2 million.
Other Financial Information
As of Oct 1, 2023, Red Robin had cash and cash equivalents of $48.6 million compared with $44 million as of Jul 9, 2023. Long-term debt as of Oct 1, 2023, was $182.1 million compared with $188.1 in the previous quarter. Inventories during the quarter were $27 million compared with $26.9 million reported in the previous quarter.
2023 Guidance
For 2023, the company expects total revenues to be at least $1.3 billion. Restaurant-level operating profit is anticipated to be in the range of 13-13.5% compared with the previous expectation of at least 13.5%. The company expects 2023 Comparable Restaurant Revenue to grow in the range of 1-3% year over year.
The selling, general and administrative costs are expected in the range of $123-$127 million compared with the previous expectation of $127-$132 million. Capital expenditures are anticipated to be between $45 million and $50 million.
In 2023, adjusted EBITDA is expected in the range of $72.5-$77.5 million compared with the previous anticipation of $72.5-$82.5 million.
McDonald's Corporation (MCD - Free Report) reported third-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. Both metrics surpassed the consensus estimate for the fifth straight quarter and increased on a year-over-year basis.
Yum China Holdings, Inc. (YUMC - Free Report) reported third-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate after beating in the preceding two quarters. Following the results, YUMC stock declined 8.8% in the after-hour trading session on Oct 31. Consumer demand weakened from late September through October, negatively impacting the company's quarterly results.
YUM! Brands, Inc. (YUM - Free Report) reported mixed third-quarter 2023 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. The top and bottom lines increased on a year-over-year basis. The company benefited from robust same-store sales and unit growth.
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Red Robin (RRGB) Q3 Earnings Beat, Adjusted EBITDA Up Y/Y
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported mixed third-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line improved on a year-over-year basis, but the bottom line declined.
Following the announcement, shares of the company dropped 1.5% during the after-hours trading session on Nov 1.
Delving Deeper
In the fiscal third quarter, Red Robin recorded an adjusted loss per share of 79 cents, surpassing the Zacks Consensus Estimate of a loss of 81 cents. The company reported an adjusted loss per share of $1.04 in the prior-year quarter.
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
Quarterly revenues of $277.6 million missed the consensus mark of $278.3 million. The top line declined 3.2% year over year. The downside was primarily caused by a decline in comps.
During the quarter under review, comparable restaurant revenues fell 3.4% year over year. The downside can be attributed to the shift away from deep discounting marketing promotions and the elimination of virtual brands. Also, the Guest count declined 10.4% during the quarter. However, this was partially offset by a 7% rise in guest checks. The rise in guest checks can be attributed to a 7.7% increase in menu prices and a 2.1% increase in discounts. However, this was partially offset by a 2.8% decline in the menu mix. Per our model, comparable restaurant revenues were anticipated to decline 1.4% year over year.
Operating Results
The restaurant-level operating profit margin was 11.1% in the fiscal third quarter (compared with 12.6% reported in the prior-year quarter). The figure compares to our projection of 11.7%.
During the fiscal third quarter, restaurant labor costs increased 3.2% year over year to $103.7 million. The figure compares to our projection of $99.5 million. Restaurant labor costs (as a percentage of restaurant revenues) increased 240 basis points (bps) year over year to 38%.
Meanwhile, other operating costs during the quarter declined 4.7% year over year to $50.4 million. The figure compares to our projection of $52.8 million. Other operating costs (as a percentage of restaurant revenues) declined 30 bps year over year to 18.4%.
During the quarter under review, the cost of sales (as a percentage of restaurant revenues) fell 120 bps year over year to 23.8%. Occupancy costs (as a percentage of restaurant revenues) increased 50 bps year over year to 8.6%.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) during the fiscal third quarter amounted to $6.8 million (compared with $3.9 million reported in the prior year quarter). Our estimate for the metric was $9.2 million.
Other Financial Information
As of Oct 1, 2023, Red Robin had cash and cash equivalents of $48.6 million compared with $44 million as of Jul 9, 2023. Long-term debt as of Oct 1, 2023, was $182.1 million compared with $188.1 in the previous quarter. Inventories during the quarter were $27 million compared with $26.9 million reported in the previous quarter.
2023 Guidance
For 2023, the company expects total revenues to be at least $1.3 billion. Restaurant-level operating profit is anticipated to be in the range of 13-13.5% compared with the previous expectation of at least 13.5%. The company expects 2023 Comparable Restaurant Revenue to grow in the range of 1-3% year over year.
The selling, general and administrative costs are expected in the range of $123-$127 million compared with the previous expectation of $127-$132 million. Capital expenditures are anticipated to be between $45 million and $50 million.
In 2023, adjusted EBITDA is expected in the range of $72.5-$77.5 million compared with the previous anticipation of $72.5-$82.5 million.
Zacks Rank & Recent Retail-Wholesale Releases
Red Robin currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McDonald's Corporation (MCD - Free Report) reported third-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. Both metrics surpassed the consensus estimate for the fifth straight quarter and increased on a year-over-year basis.
Yum China Holdings, Inc. (YUMC - Free Report) reported third-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate after beating in the preceding two quarters. Following the results, YUMC stock declined 8.8% in the after-hour trading session on Oct 31. Consumer demand weakened from late September through October, negatively impacting the company's quarterly results.
YUM! Brands, Inc. (YUM - Free Report) reported mixed third-quarter 2023 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. The top and bottom lines increased on a year-over-year basis. The company benefited from robust same-store sales and unit growth.