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Red Robin's (RRGB) Stock Down on Wider-Than-Expected Q3 Loss
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Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported mixed fiscal third-quarter 2019 results, wherein the bottom line missed the Zacks Consensus Estimate but the top line surpassed the same. Following the quarterly results, shares of Red Robin decreased 5.9% in the after-hour trading session on Nov 5. However, shares of the company have gained 19.6% compared with the industry’s 15.1% rally so far this year.
It reported loss per share of 24 cents, wider than the Zacks Consensus Estimate of a loss of 22 cents. In the year-ago quarter, the company had reported adjusted earnings of 16 cents per share.
Revenue Discussion
Revenues came in at $294.2 million, beating the Zacks Consensus Estimate of $291 million but declining 0.2% from the prior-year quarter. The downside can be primarily attributed to a decline in restaurant as well as franchise royalties, fees, and other revenues.
Comparable restaurant revenues increased 1.6% year over year (on a constant-currency basis), driven by a 4.7% gain in average check, partially offset by a 3.1% decline in guest count. The increase in average guest check was on account of a 3.2% rise in menu mix and 1.5% hike in pricing.
Notably, the increase in menu mix was primarily due to its current menu and promotional strategy.
Operating Results
Restaurant-level operating profit margin contracted 70 basis points (bps) to 16.1%. The decline was due to a 90-bps rise in labor costs and 30-bps increase in other restaurant operating expenses. Cost of sales margin remained flat. Occupancy costs declined 60 bps owing to restaurant closures.
Adjusted earnings before interest, taxes, and amortization decreased to $14.7 million from $24.2 million a year ago.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
As of Oct 6, 2019, Red Robin had cash and cash equivalents of $20.2 million compared with $18.6 million on Dec 30, 2018. The company’s long-term debt amounted to $188.9 million as of Oct 6, 2019 compared with $193.4 million on Dec 30, 2018.
As of Oct 6, 2019, Red Robin had outstanding borrowings under its credit facility of $188 million, in addition to the amount issued under letters of credit of $7.5 million.
Guidance
For 2019, Red Robin — which currently has a Zacks Rank #4 (Sell) — expects earnings within 64-99 cents compared with 95 cents to $1.20 projected earlier. The Zacks Consensus Estimate for the same is currently pegged at $1.02. The company continues to expect comparable restaurant revenue growth of down 1% to flat.
Dunkin' Brands Group, Inc. reported mixed results in third-quarter 2019, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same. Its adjusted earnings of 90 cents per share surpassed the consensus estimate of 81 cents by 11.1%. Revenues were up 1.7% year over year to $355.9 million but missed the consensus mark of $359 million.
Brinker International, Inc. (EAT - Free Report) reported mixed first-quarter fiscal 2020 results, wherein earnings were in line with the Zacks Consensus Estimate but revenues lagged the same. Adjusted earnings of $41 cents per share declined 12.8% from the year-ago quarter, mainly due to increase in stock-based compensation expenses for newly retired executives. Quarterly revenues totaled $786 million, which missed the consensus mark of $788 million but improved 4.3% on a year-over-year basis.
Chipotle Mexican Grill, Inc. (CMG - Free Report) reported third-quarter 2019 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate. The company’s adjusted earnings of $3.82 per share surpassed the Zacks Consensus Estimate of $3.20. The bottom line also improved 76.9% from the year-ago quarter, driven by increased revenues and strong operating margins. Quarterly revenues of $1.4 billion surpassed the consensus estimate by 1.8% and improved 14.6% year over year.
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Red Robin's (RRGB) Stock Down on Wider-Than-Expected Q3 Loss
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported mixed fiscal third-quarter 2019 results, wherein the bottom line missed the Zacks Consensus Estimate but the top line surpassed the same. Following the quarterly results, shares of Red Robin decreased 5.9% in the after-hour trading session on Nov 5. However, shares of the company have gained 19.6% compared with the industry’s 15.1% rally so far this year.
It reported loss per share of 24 cents, wider than the Zacks Consensus Estimate of a loss of 22 cents. In the year-ago quarter, the company had reported adjusted earnings of 16 cents per share.
Revenue Discussion
Revenues came in at $294.2 million, beating the Zacks Consensus Estimate of $291 million but declining 0.2% from the prior-year quarter. The downside can be primarily attributed to a decline in restaurant as well as franchise royalties, fees, and other revenues.
Comparable restaurant revenues increased 1.6% year over year (on a constant-currency basis), driven by a 4.7% gain in average check, partially offset by a 3.1% decline in guest count. The increase in average guest check was on account of a 3.2% rise in menu mix and 1.5% hike in pricing.
Notably, the increase in menu mix was primarily due to its current menu and promotional strategy.
Operating Results
Restaurant-level operating profit margin contracted 70 basis points (bps) to 16.1%. The decline was due to a 90-bps rise in labor costs and 30-bps increase in other restaurant operating expenses. Cost of sales margin remained flat. Occupancy costs declined 60 bps owing to restaurant closures.
Adjusted earnings before interest, taxes, and amortization decreased to $14.7 million from $24.2 million a year ago.
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
Financial Highlights
As of Oct 6, 2019, Red Robin had cash and cash equivalents of $20.2 million compared with $18.6 million on Dec 30, 2018. The company’s long-term debt amounted to $188.9 million as of Oct 6, 2019 compared with $193.4 million on Dec 30, 2018.
As of Oct 6, 2019, Red Robin had outstanding borrowings under its credit facility of $188 million, in addition to the amount issued under letters of credit of $7.5 million.
Guidance
For 2019, Red Robin — which currently has a Zacks Rank #4 (Sell) — expects earnings within 64-99 cents compared with 95 cents to $1.20 projected earlier. The Zacks Consensus Estimate for the same is currently pegged at $1.02. The company continues to expect comparable restaurant revenue growth of down 1% to flat.
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Peer Releases
Dunkin' Brands Group, Inc. reported mixed results in third-quarter 2019, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same. Its adjusted earnings of 90 cents per share surpassed the consensus estimate of 81 cents by 11.1%. Revenues were up 1.7% year over year to $355.9 million but missed the consensus mark of $359 million.
Brinker International, Inc. (EAT - Free Report) reported mixed first-quarter fiscal 2020 results, wherein earnings were in line with the Zacks Consensus Estimate but revenues lagged the same. Adjusted earnings of $41 cents per share declined 12.8% from the year-ago quarter, mainly due to increase in stock-based compensation expenses for newly retired executives. Quarterly revenues totaled $786 million, which missed the consensus mark of $788 million but improved 4.3% on a year-over-year basis.
Chipotle Mexican Grill, Inc. (CMG - Free Report) reported third-quarter 2019 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate. The company’s adjusted earnings of $3.82 per share surpassed the Zacks Consensus Estimate of $3.20. The bottom line also improved 76.9% from the year-ago quarter, driven by increased revenues and strong operating margins. Quarterly revenues of $1.4 billion surpassed the consensus estimate by 1.8% and improved 14.6% year over year.
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Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
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