Red Robin Gourmet Burgers, Inc. RRGB reported first-quarter fiscal 2020 results, wherein earnings missed the Zacks Consensus Estimate but revenues matched the same. Following the results, the company’s shares declined 13.9% yesterday. Results in the quarter were impacted by the coronavirus pandemic.
The company reported adjusted loss per share of $6.66, wider than the Zacks Consensus Estimate of a loss of $1.61. In the year-ago quarter, the company had reported adjusted earnings of 19 cents.
Revenues came in at $306.1 million, which came in line with the Zacks Consensus Estimate. However, the top line declined 25.3% year over year. The downside can be attributed to shutdown of dining rooms on account of the coronavirus pandemic.
Comparable restaurant revenues declined 20.8% year over year, owing to 20.9% fall in guest count, which was partially offset by a 0.1% increase in average guest check. The improvement in average guest check can be attributed to a 1.6% increase in pricing and a 0.3% increase from lower discounting, which was marginally negated by a 1.8% decrease in menu mix. Guest count in the quarter was hurt by a decline of 22% owing to the pandemic.
Restaurant-level operating profit margin declined to 8.8% in the quarter, compared with a decline of 18.3% in the year-ago period. Restaurant labor costs as a percentage of restaurant revenue rose 360 basis points primarily due to sales deleverage, higher wage rates, and higher group insurance costs. Other restaurant operating costs increased 340 bps primarily owing to an increase in third-party delivery fees driven by higher off-premise sales volume and increased restaurant technology costs compared with favorable adjustment in the prior-year quarter.
Cost of sales margin remained flat, while occupancy costs contracted 250 bps on account of sales deleverage impacts on rent expense and general liability and other real estate costs.
Adjusted earnings before interest, taxes and amortization was negative $10.7 million. In the prior-year quarter, the company had reported adjusted EBITDA of $34.3 million.
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
Other Financial Information
As of Apr 19, 2020, the Zacks Rank #3 (Hold) company had cash and cash equivalents of $88.9 million, compared with $30 million at the end of Dec 29, 2019. Inventories in the reported quarter declined 5.7% to $24.9 million. As of Apr 19, 2020, long-term debt increased to $281.2 million from $206.9 million at the end of Dec 29, 2019.
Stocks to Consider
Some better-ranked stocks in the same space includes Cracker Barrel Old Country Store, Inc. CBRL, Domino's Pizza, Inc. DPZ and Papa John's International, Inc. PZZA. Al these stocks carry the Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past one month, shares of Cracker Barrel have gained 40.3%.
Domino's and Papa John's have an impressive long-term earnings growth rate of 12.8% and 8%, respectively.
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Dominos Pizza Inc (DPZ) : Free Stock Analysis Report
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