Red Robin (RRGB) Set to Post Q4 Earnings: What's in Store?
Red Robin Gourmet Burgers, Inc. RRGB is scheduled to report its fourth-quarter fiscal 2023 results on Feb 28, after market close.
In the previous quarter, the company’s earnings topped the Zacks Consensus Estimate by 2.5%, while the revenues missed the same by 0.3%.
RRGB’s earnings surpassed expectations in three of the trailing four quarters and missed on the remaining occasion, the average surprise being 23.7%.
The Trend in Estimate Revision
For the quarter, the Zacks Consensus Estimate is pegged at a loss of 43 cents per share. In the year-ago quarter, Red Robin reported a loss per share of $1.35.
Red Robin Gourmet Burgers, Inc. Price and EPS Surprise
Red Robin Gourmet Burgers, Inc. price-eps-surprise | Red Robin Gourmet Burgers, Inc. Quote
The consensus mark for revenues is pegged at $304.7 million, suggesting growth of 5.1% year over year.
Factors at Play
Revenues
Red Robin's fiscal fourth-quarter’s performance is likely to have benefited from improving guest traffic (driven by dine-in demand), average guest check (attributable to favorable menu pricing and increase in discounts) and digital ecosystem. This and benefit from continued off-premise strength, limited-time menu offerings, solid loyalty program as well as the Donatos expansion are likely to have aided the company’s performance in the to-be reported quarter.
For fiscal fourth-quarter 2023, our models predict restaurant revenues to increase 5.9% year over year to $295 million. We expect average guest check in to increase 1.1% in the quarter compared with 8.8% in the year-ago quarter.
Although unfavorable menu mix and the elimination of virtual brands are headwinds, the above-mentioned tailwinds are likely to have more than offset the same in the to-be-reported quarter.
Margins
Red Robin expects to witness growth in the restaurant level operating profit margin in the fiscal fourth quarter courtesy of strategic investments made to improve the guest experience.
Our model expects restaurant level operating profit margin for the to-be-reported quarter to increase to 14.7% from 11.4% reported in the year-ago quarter.
However, increasing labor and occupancy costs, along with high selling, general and administrative expenses, are likely to have impacted the company’s bottom line to some extent in the fiscal fourth quarter.
In fiscal fourth-quarter 2023, we anticipate total costs and expenses to decline 4.9% year over year to $313.5 million.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Red Robin this time around. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: Red Robin has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: RRGB currently has a Zacks Rank of 3.
Stocks Poised to Beat Estimates
Here are some companies in the Zacks Retail-Wholesale sector, which according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.
The Gap, Inc. GPS has an Earnings ESP of +24.44% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
GPS’ earnings for the to-be-reported quarter are expected to surge 125.3%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 137.9%.
Urban Outfitters, Inc. URBN presently has an Earnings ESP of +7.34% and a Zacks Rank of 2.
URBN’s earnings topped the consensus mark in three of the last four quarters and remained flat on the remaining occasion, with the average surprise being 22%. Earnings for the to-be-reported quarter are expected to surge 87.2% year over year.
Costco Wholesale Corporation COST currently has an Earnings ESP of +1.58% and a Zacks Rank of 2.
COST’s earnings for the to-be-reported quarter are expected to increase 9.1%. The company reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 2.6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Red Robin Gourmet Burgers, Inc. (RRGB) : Free Stock Analysis Report
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