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Why Is Red Robin (RRGB) Up 11.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for Red Robin (RRGB - Free Report) . Shares have added about 11.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Red Robin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Red Robin Q3 Earnings Miss, Revenues Beat Estimates
Red Robin posted mixed third-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Both top and bottom lines declined year over year.
Red Robin’s third-quarter fiscal 2024 results declined despite some positive developments in restaurant performance and customer satisfaction. The company’s CEO G.J. Hart emphasized that its “North Star Plan” has been gaining traction, with Red Robin’s comparable restaurant revenues exceeding industry averages and customer traffic rebounding in the latter part of the quarter.
However, the macroeconomic environment added significant pressure to Red Robin’s recovery, hampering the overall impact of these operational gains. While the brand has made strides in rebuilding its customer base and revamping RRGB’s loyalty program, broader economic challenges limited the extent of its financial improvement.
Delving Deeper Into RRGB’s Q3 Performance
In the fiscal third quarter, RRGB recorded an adjusted loss per share of $1.13, wider than the Zacks Consensus Estimate of a loss of 87 cents. The company reported an adjusted loss per share of 79 cents in the prior-year quarter.
Quarterly revenues of $274.6 million beat the consensus mark of $272 million. However, the top line declined 1.1% year over year. In the quarter under review, comparable restaurant revenues increased 0.6% year over year.
RRGB’s Operating Results
The restaurant-level operating profit margin was 9% in the fiscal third quarter compared with 11.1% in the prior-year quarter.
In the fiscal third quarter, restaurant labor costs increased 3.8% year over year to $107.7 million.
Other operating costs was $49.7 million compared with $50.4 million reported in the prior-year quarter.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) in the fiscal third quarter amounted to $2.1 million compared with $6.8 million in the prior-year quarter.
Other Financial Information of RRGB
As of Oct. 6, 2024, RRGB had cash and cash equivalents of $22 million compared with $23.6 million as of Dec. 31, 2023. Long-term debt, as of Oct. 6, 2024, was $180.7 million compared with $182.6 million in the prior-year quarter. Inventories in the quarter were $27.5 million compared with $27.3 million in the previous quarter.
RRGB’s 2024 Guidance
For fiscal 2024, the company continues to expect total revenues to be approximately $1.25 billion. Restaurant-level operating profit is anticipated to be 10.5% down from the previous expectation of 11-11.5%. Capital expenditures are anticipated to be $25 million. In 2024, adjusted EBITDA is expected in the range of $35-$37.5 million, down from the previous expectation of $40-$45 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -115.94% due to these changes.
VGM Scores
Currently, Red Robin has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Red Robin has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Red Robin is part of the Zacks Retail - Restaurants industry. Over the past month, Cheesecake Factory (CAKE - Free Report) , a stock from the same industry, has gained 6.6%. The company reported its results for the quarter ended September 2024 more than a month ago.
Cheesecake Factory reported revenues of $865.47 million in the last reported quarter, representing a year-over-year change of +4.3%. EPS of $0.58 for the same period compares with $0.39 a year ago.
Cheesecake Factory is expected to post earnings of $0.91 per share for the current quarter, representing a year-over-year change of +13.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.5%.
Cheesecake Factory has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Why Is Red Robin (RRGB) Up 11.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Red Robin (RRGB - Free Report) . Shares have added about 11.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Red Robin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Red Robin Q3 Earnings Miss, Revenues Beat Estimates
Red Robin posted mixed third-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Both top and bottom lines declined year over year.
Red Robin’s third-quarter fiscal 2024 results declined despite some positive developments in restaurant performance and customer satisfaction. The company’s CEO G.J. Hart emphasized that its “North Star Plan” has been gaining traction, with Red Robin’s comparable restaurant revenues exceeding industry averages and customer traffic rebounding in the latter part of the quarter.
However, the macroeconomic environment added significant pressure to Red Robin’s recovery, hampering the overall impact of these operational gains. While the brand has made strides in rebuilding its customer base and revamping RRGB’s loyalty program, broader economic challenges limited the extent of its financial improvement.
Delving Deeper Into RRGB’s Q3 Performance
In the fiscal third quarter, RRGB recorded an adjusted loss per share of $1.13, wider than the Zacks Consensus Estimate of a loss of 87 cents. The company reported an adjusted loss per share of 79 cents in the prior-year quarter.
Quarterly revenues of $274.6 million beat the consensus mark of $272 million. However, the top line declined 1.1% year over year. In the quarter under review, comparable restaurant revenues increased 0.6% year over year.
RRGB’s Operating Results
The restaurant-level operating profit margin was 9% in the fiscal third quarter compared with 11.1% in the prior-year quarter.
In the fiscal third quarter, restaurant labor costs increased 3.8% year over year to $107.7 million.
Other operating costs was $49.7 million compared with $50.4 million reported in the prior-year quarter.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) in the fiscal third quarter amounted to $2.1 million compared with $6.8 million in the prior-year quarter.
Other Financial Information of RRGB
As of Oct. 6, 2024, RRGB had cash and cash equivalents of $22 million compared with $23.6 million as of Dec. 31, 2023. Long-term debt, as of Oct. 6, 2024, was $180.7 million compared with $182.6 million in the prior-year quarter. Inventories in the quarter were $27.5 million compared with $27.3 million in the previous quarter.
RRGB’s 2024 Guidance
For fiscal 2024, the company continues to expect total revenues to be approximately $1.25 billion. Restaurant-level operating profit is anticipated to be 10.5% down from the previous expectation of 11-11.5%. Capital expenditures are anticipated to be $25 million. In 2024, adjusted EBITDA is expected in the range of $35-$37.5 million, down from the previous expectation of $40-$45 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -115.94% due to these changes.
VGM Scores
Currently, Red Robin has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Red Robin has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Red Robin is part of the Zacks Retail - Restaurants industry. Over the past month, Cheesecake Factory (CAKE - Free Report) , a stock from the same industry, has gained 6.6%. The company reported its results for the quarter ended September 2024 more than a month ago.
Cheesecake Factory reported revenues of $865.47 million in the last reported quarter, representing a year-over-year change of +4.3%. EPS of $0.58 for the same period compares with $0.39 a year ago.
Cheesecake Factory is expected to post earnings of $0.91 per share for the current quarter, representing a year-over-year change of +13.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.5%.
Cheesecake Factory has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.