Yahoo Finance Red Robin's (RRGB) Q4 Earnings & Revenues Miss, Margin Falls
Red Robin Gourmet Burgers, Inc. RRGB reported its fourth-quarter fiscal 2022 results, with both earnings and revenues missing the Zacks Consensus Estimate.
Earnings & Revenue Discussion
In the fiscal fourth quarter, Red Robin reported an adjusted loss per share of $1.35, wider than the Zacks Consensus Estimate of a loss of 66 cents per share. In the year-ago quarter, the company reported an adjusted loss of $1.03 per share.
Quarterly revenues of $290.1 million missed the consensus mark of $293 million. The top line however increased 2.4% year over year. The upside was primarily driven by favorable guest check and increased menu mix and pricing.
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
During the quarter under review, comparable restaurant revenues rose 2.5% year over year, primarily driven by an 8.8% rise in guest check. However, average guest count declined 6.3%. The rise in guest check can be attributed to a 7.3% increase in pricing, a 2.2% improvement in menu mix and a 0.7% decline in discounts.
Operating Results
The restaurant-level operating profit margin was 11.4% in the fiscal fourth quarter compared with 13% reported in the prior-year quarter.
During the fiscal fourth quarter, restaurant labor costs (as a percentage of restaurant revenues) increased 50 basis points (bps) year over year to 34.6%. The increase was primarily due to labor inflation.
Meanwhile, other operating costs declined 40 bps year over year to 17.9%. During the quarter under review, cost of sales increased 120 bps year over year to 24.9%. Occupancy costs fell 20 bps year over year to 7.7%.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) during the fiscal fourth quarter amounted to $8.9 million, unchanged from the year-ago quarter.
Other Financial Information
As of Dec 25, 2022, Red Robin had cash and cash equivalents of $48.8 million compared with $22.8 million as of Dec 26, 2021. Long-term debt as of Dec 25, 2022 was $203.2 million compared with $167.3 million as of Dec 26, 2021. Inventories during the quarter were $26.4 million, compared with $25.2 million in the year-ago period.
Fiscal 2022 Highlights
In fiscal 2022, total revenues increased 9% to $1.3 billion from fiscal 2021. Comparable restaurant revenues increased 9.2% year over year.
Operating costs as a percentage of restaurant revenues increased 130 bps to 87% in fiscal 2022.
Adjusted EBITDA declined to $52.8 million in fiscal 2022 from $63.5 million in fiscal 2021.
2023 Guidance
For 2023, the company expects total revenues to be approximately $1.3 billion.
Restaurant-level operating profit is anticipated to be at least 13%.
The selling, general and administrative costs are expected in the range of $120-$125 million. Capital expenditures are anticipated to be between $35 million and $40 million.
Adjusted EBITDA is expected in the range of $62.5-$72.5 million.
Zacks Rank & Key Picks
Red Robin currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Retail-Wholesale sector are:
Chuy's Holdings, Inc. CHUY currently sports a Zacks Rank #1. CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have increased 60.8% in the past six months.
The Zacks Consensus Estimate for CHUY’s 2023 sales and EPS suggests growth of 10.8% and 16.1%, respectively, from the corresponding year-ago period’s levels.
Arcos Dorados Holdings Inc. ARCO carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth rate of 11.6%. Shares of the company have increased 13% in the past six months.
The Zacks Consensus Estimate for ARCO’s 2023 sales and EPS suggests growth of 8.1% and 4.2%, respectively, from the year-ago period’s levels.
Brinker International, Inc. EAT carries a Zacks Rank #2. EAT has a long-term earnings growth rate of 7.1%. The stock has increased 47.3% in the past six months.
The Zacks Consensus Estimate for EAT’s fiscal 2024 sales and EPS suggests growth of 3.9% and 36.5%, respectively, from the year-ago period’s reported levels.
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