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It has been about a month since the last earnings report for Red Robin (RRGB). 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.