UK Markets closed

Red Robin (RRGB) Stock Up on Q1 Earnings & Revenues Beat

·4-min read

Red Robin Gourmet Burgers, Inc. RRGB reported first-quarter fiscal 2022 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines improved on a year-over-year basis. Following the results, the company’s shares gained 16% in the after-hours trading session on May 26.

Earnings & Revenue Discussion

In the first quarter, Red Robin reported an adjusted loss per share of 12 cents, narrower than the Zacks Consensus Estimate of a loss of 68 cents. In the year-ago quarter, the company reported an adjusted loss of 30 cents.

Quarterly revenues of $395.6 million surpassed the consensus mark of $379 million. The top line increased 21.2% year over year. The upside was primarily driven by favorable guest count, increased menu mix and pricing and discounted offerings.

During the quarter under review, comparable restaurant revenues climbed 19.7% year over year. The upside was primarily driven by a 6.9% rise in guest count and a 12.8% increase in average guest checks. The rise in average guest check can be attributed to a 5.4% increase in pricing, a 6% improvement in menu mix and a 1.4% decline in discounts. Menu mix, during the fiscal first quarter, gained from higher dine-in sales and limited-time menu offerings.

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 and EPS Surprise

Red Robin Gourmet Burgers, Inc. price-consensus-eps-surprise-chart | Red Robin Gourmet Burgers, Inc. Quote

Operating Results

The restaurant-level operating profit margin was 14% in the fiscal first quarter compared with 15.7% reported in the prior-year quarter.

During the fiscal first quarter, restaurant labor costs (as a percentage of restaurant revenues) increased 130 bps year over year to 36.3%. The upside was primarily due to labor inflation.

Meanwhile, other operating costs declined 30 bps year over year to 17.8%. During the quarter under review, the cost of sales increased 220 bps year over year to 23.9%. Occupancy costs fell 140 bps year over year to 8%.

Adjusted earnings before interest expenses, income taxes, depreciation and amortization during the fiscal first quarter amounted to $28 million compared with $27.4 million in the year-ago quarter.

Other Financial Information

As of Apr 17, 2022, Red Robin had cash and cash equivalents of $33.8 million compared with $22.8 million as of Dec 26, 2021. Long-term debt as of Apr 17, 2022, stood at $192.4 million compared with $167.3 million as of Dec 26, 2021.

Inventories during the quarter were $25.2 million flat year over year.

Guidance

Red Robin reiterated 2022 guidance. For fiscal 2022, the company continues to expect capital expenditures in the range of $40 million to $50 million. This includes investments related to restaurants, infrastructure and systems capital maintenance, digital guest, operational technology solutions and off-premises execution enhancements.

For fiscal 2022, the company continues to expect selling, general and administrative costs in the range of $145 million to $155 million. Adjusted EBITDA is anticipated between $80 million and $90 million. In 2022, the company anticipates commodity and restaurant labor cost inflation to be in the mid-to-high single digit.

Zacks Rank & Key Picks

Red Robin currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Retail-Wholesale sector are MarineMax, Inc. HZO, BBQ Holdings, Inc. BBQ and Cracker Barrel Old Country Store CBRL.

MarineMax sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 32.8%, on average. Shares of the company have declined 19.1% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MarineMax’s 2022 sales and EPS suggests growth of 16% and 21.5%, respectively, from the year-ago period’s levels.

BBQ Holdings carries a Zacks Rank #2 (Buy). BBQ Holdings has a long-term earnings growth of 14%. Shares of the company have decreased 11.7% in the past year.

The Zacks Consensus Estimate for BBQ Holdings’ 2022 sales and EPS suggests growth of 46.1% and 67.6%, respectively, from the year-ago period’s levels.

Cracker Barrel carries a Zacks Rank #2. Cracker Barrel has a long-term earnings growth of 9.4%. Shares of the company have declined 34.8% in the past year.

The Zacks Consensus Estimate for Cracker Barrel’s 2022 sales and EPS suggests growth of 17.3% and 33.5%, respectively, from the year-ago period’s levels.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report
 
Red Robin Gourmet Burgers, Inc. (RRGB) : Free Stock Analysis Report
 
MarineMax, Inc. (HZO) : Free Stock Analysis Report
 
BBQ Holdings, Inc. (BBQ) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research