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zacks

Red Robin Gourmet Burgers (RRGB)

  • By Zacks Equity Research
  • On 1:00 am EST, Tuesday November 10, 2009

Red Robin Gourmet Burgers (NasdaqGS: RRGB - News) is vulnerable to economic headwinds, and we believe that the stock will continue to underperform the restaurant industry. Impeding the growth is its sagging same-store sales and declining traffic counts.

The company's third-quarter 2009 same-store sales fell 14.9%. The chain expects guest counts to remain negative, and expects restaurant-level operating margins to decline by 150 to 160 basis points in fiscal year 2009.

In addition, more than 50% of total restaurants are located in areas, which have been hit hard by the housing downturn and economic slowdown. This may dampen the company's growth potential.

RED ROBIN GOURM (RRGB): Free Stock Analysis Report

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