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What Happened?
Shares of burger restaurant chain Red Robin (NASDAQ:RRGB) jumped 66.2% in the afternoon session after the company reported impressive first quarter 2025 results which blew past analysts' sales, EPS and EBITDA expectations. In addition, its full-year EPS guidance trumped Wall Street's estimates.
Comparable restaurant revenue rose 3.1%, supported primarily by menu price increases that offset a dip in traffic. Restaurant-level operating profit margin climbed nearly 30% compared to last year, helped by reduced food and labor costs. This expansion in profit margin was a key reason the company's adjusted earnings per share swung from a loss to a gain.
Despite the upbeat quarter, Red Robin trimmed its full-year revenue forecast, pointing to softer sales expectations ahead. Zooming out, this was a strong quarter as nearly all investors expected an earnings per share loss.
After the initial pop the shares cooled down and closed the day at $5.09, up 61.4% from previous close.
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What The Market Is Telling Us
Red Robin’s shares are extremely volatile and have had 58 moves greater than 5% over the last year. But moves this big are rare even for Red Robin and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 6.6% after the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
Red Robin is down 9.2% since the beginning of the year, and at $5.15 per share, it is trading 42.1% below its 52-week high of $8.89 from June 2024. Investors who bought $1,000 worth of Red Robin’s shares 5 years ago would now be looking at an investment worth $371.30.
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