Red Robin Gourmet Burgers, Inc. RRGB posted first-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis.
Red Robin delivered strong sales and profit growth in the first quarter, reflecting the benefits of ongoing investments in food quality and hospitality made over the past two and a half years. While the company’s operational foundation has strengthened, management emphasized that the brand’s turnaround is still in progress.
To build on this momentum, Red Robin is focusing on four key priorities: sustaining operational execution and guest experience, driving sustainable traffic growth through enhanced marketing, improving its financial position by reducing debt and boosting free cash flow, and reinvesting in restaurant upgrades to align the dining atmosphere with recent service improvements. The company is optimistic and anticipates the initiatives to provide everyday value and drive growth.
Following the announcements, the company’s shares rallied 53.4% during yesterday’s after-hours trading session.
Delving Deeper Into RRGB’s Q1 Performance
In the fiscal first quarter, RRGB recorded an adjusted earnings per share (EPS) of 19 cents, beating the Zacks Consensus Estimate of a loss of 57 cents. The company reported an adjusted loss per share of 73 cents in the prior-year quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
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 $392.4 million beat the consensus mark of $387 million. The top line increased 1% on a year-over-year basis. In the quarter under review, comparable restaurant revenues increased 3.1% year over year against a 6.5% decline reported in the prior-year quarter.
RRGB’s Operating Results
The restaurant-level operating profit margin was 14.3% in the fiscal third quarter compared with 11% in the prior-year quarter. Our projection for the metric was 12.7%.
In the fiscal first quarter, restaurant labor costs came in at $143.1 million compared with $149 million reported in the prior-year quarter. The figure compares with our projection of $135.7 million.
Other operating costs were $67.5 million compared with $66.5 million reported in the prior-year quarter. Our prediction for the metric was $66.5 million.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) in the fiscal first quarter amounted to $27.9 million compared with $13.4 million in the prior-year quarter. Our estimate for the metric was $23.2 million.
Other Financial Information of RRGB
As of April 20, 2025, RRGB had cash and cash equivalents of $24.2 million compared with $30.7 million as of Dec. 29, 2024. Long-term debt, as of April 20, 2025, was $164.8 million compared with $181.6 million as of Dec. 29, 2024. Inventories in the quarter were $27 million compared with $26.7 million in the previous quarter.
RRGB’s Q2 & Fiscal 2025 Guidance
In the second quarter of fiscal 2025, the company foresees a decline of about 3% in comparable restaurant sales, influenced by a roughly 240 basis point headwind stemming from the non-recurrence of a 2024 benefit related to changes in the company’s loyalty program. Adjusted EBITDA for the quarter is expected to be between $13 million and $16 million.
The company has provided updated guidance for fiscal year 2025. Total revenues are now expected to range between $1.21 billion and $1.23 billion, slightly lower than the initial projection of $1.225 billion to $1.25 billion.
Restaurant-level operating profit is expected to range from 12% to 13%. In 2025, adjusted EBITDA (excluding stock-based compensation) is anticipated to be between $60 million and $65 million. Capital expenditures are estimated to be approximately $30 million.
RRGB’s Zacks Rank & Key Picks
Red Robin currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are BJ's Restaurants, Inc. BJRI, Wingstop Inc. WING and CAVA Group, Inc. CAVA.
BJ's Restaurants presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
BJ's Restaurants delivered a trailing four-quarter earnings surprise of 30.9%, on average. The stock has inched up 27.6% in the year-to-date period. The Zacks Consensus Estimate for BJ's Restaurants’ 2025 sales and EPS implies growth of 3.2% and 23.8%, respectively, from the year-ago levels.
Wingstop presently holds a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 6.1%, on average. The stock has gained 19.8% in the year-to-date period.
The Zacks Consensus Estimate for Wingstop’s 2025 sales and EPS indicates an increase of 16.8% and 6.6%, respectively, from the year-ago levels.
CAVA currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 26.9%, on average. The stock has declined 27.4% in the year-to-date period.
The Zacks Consensus Estimate for CAVA’s 2025 sales and EPS indicates growth of 24.3% and 38.1%, respectively, from the year-ago period’s levels.
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