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Red Robin (RRGB) Q4 Earnings Miss Estimates, Stock Down
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Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis.
Following the announcement, the company’s shares fell 12.2% during the after-hours trading session on Feb 28. Negative investor sentiments were witnessed as the company cited concerns regarding the anticipated reduction in restaurant sales and adjusted EBITDA in 2024 due to the shift back to a 52-week fiscal year and the impact of sale-leaseback transactions on rent expenses.
Delving Deeper
In the fiscal fourth quarter, Red Robin recorded an adjusted loss per share of 66 cents, wider than the Zacks Consensus Estimate of a loss of 43 cents. The company reported an adjusted loss per share of $1.38 in the prior-year quarter.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $309 million beat the consensus mark of $305 million. The top line increased 6.7% year over year. The rise in revenue was primarily driven by an extra operating week (within the fourth quarter), which constituted the 53rd week of the fiscal year. This additional week contributed approximately $24.5 million to restaurant revenues.
During the quarter under review, comparable restaurant revenues fell 2.7% year over year. The downside can be attributed to the shift away from deep discounting marketing promotions. Also, the Guest count declined 7.6% during the quarter. However, this was partially offset by a 4.9% rise in guest checks. The rise in guest checks can be attributed to a 6.3% increase in menu prices and a 1% increase in discounts. This was partially offset by a 2.4% decline in the menu mix. Per our model, comparable restaurant revenues were anticipated to decline 0.5% year over year.
Operating Results
The restaurant-level operating profit margin was 12.2% in the fiscal fourth quarter (compared with 11.3% reported in the prior-year quarter). The figure compares to our projection of 14.7%.
During the fiscal fourth quarter, restaurant labor costs increased 14.4% year over year to $114.7 million. The figure compares to our projection of $100.3 million.
Other operating costs during the quarter declined 2.4% year over year to $50.8 million. The figure compares to our projection of $54 million.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) during the fiscal fourth quarter amounted to $10.6 million (compared with $8.4 million reported in the prior-year quarter). Our estimate for the metric was $16.5 million.
Other Financial Information
As of Dec 1, 2023, Red Robin had cash and cash equivalents of $23.6 million compared with $48.8 million as of Dec 25, 2022. Long-term debt as of Dec 31, 2023, was $182.6 million compared with $203.2 million in the prior-year quarter. Inventories during the quarter were $26.8 million compared with $26.4 million reported in the previous quarter.
2023 Highlights
Total revenues in the fiscal 2023 amounted to $1.3 billion compared with $1.27 billion in fiscal 2022.
Adjusted EBITDA in the fiscal 2023 came in at $68.9 million compared with $51.7 million reported in fiscal 2022.
In the fiscal 2023, adjusted loss per share came in at $1.44 compared with $3.32 reported in the previous year.
2024 Guidance
For the fiscal 2024, the company expects total revenues in the range of $1.25-$1.28 billion. Restaurant-level operating profit is anticipated to be in the range of 12.5-13.5%. Capital expenditures are anticipated to be between $25 million and $35 million. In 2024, adjusted EBITDA is expected in the range of $60-$70 million.
McDonald's Corporation (MCD - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the quarter, MCD reported adjusted EPS of $2.95, outpacing the Zacks Consensus Estimate of $2.81. Adjusted earnings increased 11% from the prior-year quarter’s figure. Quarterly net revenues of $6.4 billion missed the consensus mark of $6.5 billion. The top line rose 8% year over year. The upside was backed by menu price increases, effective marketing campaigns and continued digital and delivery growth.
Yum China Holdings, Inc. (YUMC - Free Report) reported impressive fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
During the quarter, YUMC reported adjusted EPS of 25 cents, beating the Zacks Consensus Estimate of 13 cents. The bottom line surged 92.3% from 13 cents reported a year ago. Quarterly revenues of $2.5 billion outpaced the consensus mark of $2.4 billion. The top line rose 19.4% on a year-over-year basis. Excluding foreign currency translation, revenues increased 21% year over year. The upside can be attributed to net new unit contribution (12%) and same-store sales growth (4%).
Brinker International, Inc. (EAT - Free Report) reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. Effective marketing and pricing strategies backed the upside. Sequential improvements in guest traffic bode well.
During the quarter, EAT reported adjusted EPS of 99 cents, surpassing the Zacks Consensus Estimate of a loss of $1.47. The company reported an adjusted EPS of 76 cents per share in the prior-year quarter. Quarterly revenues of $1.07 billion missed the Zacks Consensus Estimate of $1.08 billion. The top line increased 5.4% on a year-over-year basis. EAT gained from Chili's solid performance.
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Red Robin (RRGB) Q4 Earnings Miss Estimates, Stock Down
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis.
Following the announcement, the company’s shares fell 12.2% during the after-hours trading session on Feb 28. Negative investor sentiments were witnessed as the company cited concerns regarding the anticipated reduction in restaurant sales and adjusted EBITDA in 2024 due to the shift back to a 52-week fiscal year and the impact of sale-leaseback transactions on rent expenses.
Delving Deeper
In the fiscal fourth quarter, Red Robin recorded an adjusted loss per share of 66 cents, wider than the Zacks Consensus Estimate of a loss of 43 cents. The company reported an adjusted loss per share of $1.38 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 $309 million beat the consensus mark of $305 million. The top line increased 6.7% year over year. The rise in revenue was primarily driven by an extra operating week (within the fourth quarter), which constituted the 53rd week of the fiscal year. This additional week contributed approximately $24.5 million to restaurant revenues.
During the quarter under review, comparable restaurant revenues fell 2.7% year over year. The downside can be attributed to the shift away from deep discounting marketing promotions. Also, the Guest count declined 7.6% during the quarter. However, this was partially offset by a 4.9% rise in guest checks. The rise in guest checks can be attributed to a 6.3% increase in menu prices and a 1% increase in discounts. This was partially offset by a 2.4% decline in the menu mix. Per our model, comparable restaurant revenues were anticipated to decline 0.5% year over year.
Operating Results
The restaurant-level operating profit margin was 12.2% in the fiscal fourth quarter (compared with 11.3% reported in the prior-year quarter). The figure compares to our projection of 14.7%.
During the fiscal fourth quarter, restaurant labor costs increased 14.4% year over year to $114.7 million. The figure compares to our projection of $100.3 million.
Other operating costs during the quarter declined 2.4% year over year to $50.8 million. The figure compares to our projection of $54 million.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) during the fiscal fourth quarter amounted to $10.6 million (compared with $8.4 million reported in the prior-year quarter). Our estimate for the metric was $16.5 million.
Other Financial Information
As of Dec 1, 2023, Red Robin had cash and cash equivalents of $23.6 million compared with $48.8 million as of Dec 25, 2022. Long-term debt as of Dec 31, 2023, was $182.6 million compared with $203.2 million in the prior-year quarter. Inventories during the quarter were $26.8 million compared with $26.4 million reported in the previous quarter.
2023 Highlights
Total revenues in the fiscal 2023 amounted to $1.3 billion compared with $1.27 billion in fiscal 2022.
Adjusted EBITDA in the fiscal 2023 came in at $68.9 million compared with $51.7 million reported in fiscal 2022.
In the fiscal 2023, adjusted loss per share came in at $1.44 compared with $3.32 reported in the previous year.
2024 Guidance
For the fiscal 2024, the company expects total revenues in the range of $1.25-$1.28 billion. Restaurant-level operating profit is anticipated to be in the range of 12.5-13.5%. Capital expenditures are anticipated to be between $25 million and $35 million. In 2024, adjusted EBITDA is expected in the range of $60-$70 million.
Zacks Rank & Key Picks
Red Robin currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
McDonald's Corporation (MCD - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the quarter, MCD reported adjusted EPS of $2.95, outpacing the Zacks Consensus Estimate of $2.81. Adjusted earnings increased 11% from the prior-year quarter’s figure. Quarterly net revenues of $6.4 billion missed the consensus mark of $6.5 billion. The top line rose 8% year over year. The upside was backed by menu price increases, effective marketing campaigns and continued digital and delivery growth.
Yum China Holdings, Inc. (YUMC - Free Report) reported impressive fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
During the quarter, YUMC reported adjusted EPS of 25 cents, beating the Zacks Consensus Estimate of 13 cents. The bottom line surged 92.3% from 13 cents reported a year ago. Quarterly revenues of $2.5 billion outpaced the consensus mark of $2.4 billion. The top line rose 19.4% on a year-over-year basis. Excluding foreign currency translation, revenues increased 21% year over year. The upside can be attributed to net new unit contribution (12%) and same-store sales growth (4%).
Brinker International, Inc. (EAT - Free Report) reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis. Effective marketing and pricing strategies backed the upside. Sequential improvements in guest traffic bode well.
During the quarter, EAT reported adjusted EPS of 99 cents, surpassing the Zacks Consensus Estimate of a loss of $1.47. The company reported an adjusted EPS of 76 cents per share in the prior-year quarter. Quarterly revenues of $1.07 billion missed the Zacks Consensus Estimate of $1.08 billion. The top line increased 5.4% on a year-over-year basis. EAT gained from Chili's solid performance.