We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Red Robin (RRGB) Q3 Earnings Meet Estimates, Sales Top
Read MoreHide Full Article
Red Robin Gourmet Burgers Inc. (RRGB - Free Report) reported third-quarter 2016 results with earnings meeting the Zacks Consensus Estimate and revenues beating the same.
Earnings & Revenue Discussion
Red Robin’s adjusted earnings of 38 cents per share were in line with the Zacks Consensus Estimate. However, earnings declined 34.5% year over year owing to weak comps and lower margins.
Revenues of $297.3 million marginally beat the Zacks Consensus Estimate and grew 4.9% year over year, driven by new restaurant openings.
Behind the Headline Numbers
During the quarter, restaurant revenues went up 5.1% year over year to $293.9 million. Franchise royalties and fee revenues, however, decreased 11.9% to about $3.4 million.
Company-owned restaurants’ comps declined 3.6% year over year, worse than the prior-quarter comps decline of 3.2%. The decrease was led by a 2.4% decline in traffic and a 1.2% fall in average guest check.
Despite lower cost of sales, restaurant-level operating profit margin decreased 300 basis points (bps) to 18.6% due to higher labor and occupancy costs and other restaurant operating expenses.
Adjusted earnings before interest, taxes, and amortization (EBITDA) decreased 12.5% to $27.3 million from $31.2 million in the year-ago quarter.
For the fourth quarter, the company expects total revenues to grow between 4.0% and 6.0%. The growth is expected to be driven by increased operating weeks associated with higher locations opened and acquired, partially offset by lower comparable restaurant revenue ranging between 1.5% and 3.5%.
The company plans to open five new Red Robin restaurants in the fourth quarter.
General and administrative costs are anticipated to be up to $22.0 million, while selling expenses are expected to be roughly 3.5% of total revenues.
Adjusted EBITDA is expected to range between $28 million and $32 million in the quarter. This brings full-year 2016 adjusted EBITDA expectation to a range of $141 million to $145 million, down from the previously issued guidance of $145 million and $150 million.
Potbelly currently carries a Zacks Rank #2 (Buy). Its current year growth estimate is pegged at 26.7% compared with the industry average of 7%.
Wingstop current year growth estimate is pegged at 18.1% compared with the industry average of 7%. It currently carries a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Red Robin (RRGB) Q3 Earnings Meet Estimates, Sales Top
Red Robin Gourmet Burgers Inc. (RRGB - Free Report) reported third-quarter 2016 results with earnings meeting the Zacks Consensus Estimate and revenues beating the same.
Earnings & Revenue Discussion
Red Robin’s adjusted earnings of 38 cents per share were in line with the Zacks Consensus Estimate. However, earnings declined 34.5% year over year owing to weak comps and lower margins.
Revenues of $297.3 million marginally beat the Zacks Consensus Estimate and grew 4.9% year over year, driven by new restaurant openings.
Behind the Headline Numbers
During the quarter, restaurant revenues went up 5.1% year over year to $293.9 million. Franchise royalties and fee revenues, however, decreased 11.9% to about $3.4 million.
Company-owned restaurants’ comps declined 3.6% year over year, worse than the prior-quarter comps decline of 3.2%. The decrease was led by a 2.4% decline in traffic and a 1.2% fall in average guest check.
Despite lower cost of sales, restaurant-level operating profit margin decreased 300 basis points (bps) to 18.6% due to higher labor and occupancy costs and other restaurant operating expenses.
Adjusted earnings before interest, taxes, and amortization (EBITDA) decreased 12.5% to $27.3 million from $31.2 million in the year-ago quarter.
Fourth-Quarter Guidance
For the fourth quarter, the company expects total revenues to grow between 4.0% and 6.0%. The growth is expected to be driven by increased operating weeks associated with higher locations opened and acquired, partially offset by lower comparable restaurant revenue ranging between 1.5% and 3.5%.
The company plans to open five new Red Robin restaurants in the fourth quarter.
General and administrative costs are anticipated to be up to $22.0 million, while selling expenses are expected to be roughly 3.5% of total revenues.
Adjusted EBITDA is expected to range between $28 million and $32 million in the quarter. This brings full-year 2016 adjusted EBITDA expectation to a range of $141 million to $145 million, down from the previously issued guidance of $145 million and $150 million.
RED ROBIN GOURM Price, Consensus and EPS Surprise
RED ROBIN GOURM Price, Consensus and EPS Surprise | RED ROBIN GOURM Quote
Zacks Rank and Stocks to Consider
Currently, Red Robin carries a Zacks Rank #4 (Sell).
Better-ranked restaurant stocks include Domino’s Pizza, Inc. (DPZ - Free Report) , Potbelly Corporation (PBPB - Free Report) and Wingstop, Inc. (WING - Free Report) .
Domino’s current year growth estimate is pegged at 22.8% compared with the industry average of 7%. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Potbelly currently carries a Zacks Rank #2 (Buy). Its current year growth estimate is pegged at 26.7% compared with the industry average of 7%.
Wingstop current year growth estimate is pegged at 18.1% compared with the industry average of 7%. It currently carries a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>