Red Robin Gourmet Burgers, Inc. RRGB 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.  Following the results, the company’s shares declined 10.1% during yesterday’s after-hours trading session.

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.

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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. Our projection for the metric was 10.2%.

In the fiscal third quarter, restaurant labor costs increased 3.8% year over year to $107.7 million. The figure compares with our projection of $105.1 million.

Other operating costs was $49.7 million compared with $50.4 million reported in the prior-year quarter. Our prediction for the metric was $47.3 million.

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. Our estimate for the metric was $6.3 million.

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.

RRGB’s 2024 Guidance

For fiscal 2024, the company continues to expect total revenues to be approximately $1.25 billion. Restaurant-level operating profit is anticipated to be 10.5% down from the previous expectation of 11-11.5%. Capital expenditures are anticipated to be $25 million. In 2024, adjusted EBITDA is expected in the range of $35-$37.5 million, down from the previous expectation of $40-$45 million.

RRGB’s Zacks Rank

Red Robin currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Retail-Wholesale Releases

Chipotle Mexican Grill, Inc. CMG reported mixed third-quarter 2024 results, with earnings beating the Zacks Consensus Estimate for the seventh consecutive quarter but revenues missing the same after beating in the preceding four quarters.

CMG reported adjusted EPS of 27 cents, surpassing the Zacks Consensus Estimate of 25 cents. The bottom line increased 17.4% from 23 cents reported in the year-ago quarter. Quarterly revenues of $2,793.6 million missed the consensus mark of $2,817 million. However, the top line rose 13% on a year-over-year basis. This upside was driven by strong comparable restaurant sales growth, backed by higher transactions of 3.3% as well as a 2.7% rise in average checks.

Shake Shack Inc. SHAK posted third-quarter fiscal 2024 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Both top and bottom lines also increased on a year-over-year basis. The company ramped up its investment in marketing strategies and programs, aimed at increasing guest engagement and brand awareness, even amid a challenging market environment. These efforts have paid off, as the company has achieved some of the highest brand awareness levels on record, which, in turn, is fueling robust sales and profitability growth.

SHAK’s fiscal third-quarter adjusted EPS came in at 25 cents, which beat the Zacks Consensus Estimate of 20 cents. In the prior-year quarter, the company reported adjusted EPS of 17 cents. Quarterly revenues of $316.9 million beat the consensus mark of $315 million. The top line increased 14.7% on a year-over-year basis.

BJ's Restaurants, Inc. BJRI reported third-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Both top and bottom lines increased on a year-over-year basis.

The company reported an adjusted loss per share of 13 cents. The Zacks Consensus Estimate for the metric was 3 cents per share-. In the year-ago quarter, it recorded an adjusted loss per share of 16 cents. Total revenues of $325.7 million beat the consensus mark by 0.04%. The top line inched up 2.2% year over year. This upside was backed by strong guest traffic and Pizookie Meal Deal performance.

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