Red Robin Gourmet Burgers, Inc. RRGB posted a financial rollercoaster in the second quarter of fiscal 2024, where earnings veered off course from expectations while revenues triumphed. Despite a year-over-year revenue growth, the bottom line experienced a dip from the comparable quarter.
Upon the release of these results, the company’s shares plummeted by a substantial 14% during the after-hours trading on Aug 22. Investor discontent surfaced as Red Robin adjusted its 2024 outlook downwards, citing industry-wide sluggishness as the culprit.
Exploring the Details
In the second fiscal quarter, RRGB recorded an adjusted loss per share of 48 cents, missing the Zacks Consensus Estimate of a loss of 41 cents. This was also wider than the 24 cents per share loss reported in the same quarter of the prior year.
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 $300.2 million surpassed the consensus forecast of $296 million. This marked a modest 0.5% ascendancy in the top line year over year, with comparable restaurant revenues experiencing a 1.4% increase.
Operational Insights
The restaurant-level operating profit margin in the second fiscal quarter stood at 11.8%, a decline from 12.6% in the corresponding quarter of the previous year. Notably, this operated slightly below the projected rate of 11.9%.
During the same quarter, restaurant labor costs saw a 3.9% year-over-year escalation to $113.9 million, slightly above the anticipated $112.2 million. Additionally, other operating costs came in at $51.7 million, aligning closely with projections.
Financial Figures Overview
As of July 14, 2024, RRGB held cash and cash equivalents amounting to $23.1 million, reflecting a slight dip from the previous year-end. Long-term debt was $162.3 million, supporting a reduction from the prior-year level. Inventories similarly showed a minor uptick in the quarter.
Revised 2024 Projections
For fiscal 2024, Red Robin anticipates total revenues hovering around $1.25 billion, a slight adjustment from the initial forecast range. The restaurant-level operating profit margin is forecasted to land lower than previously expected, accompanied by adjusted EBITDA projections now reduced.
Industry Comparisons
Among recent reports, various players in the retail-wholesale sector have experienced shifts in their financial performances. While some, like Chipotle, have seen success bolstered by strategy and innovation, others, such as McDonald’s, grapple with challenges amid industry pressures and external conflicts.
