Zacks
0
All posts from Zacks
Zacks in Our Research. Your Success.,

Red Robin (RRGB) Falls to 52-Week Low on Guidance Cut

Red Robin Gourmet Burgers RRGB plunged to a new 52-week low of $48.39 on May 20.

Shares of this Seattle, WA-based casual dining restaurant chain declined 22% despite reporting decent first-quarter 2016 results owing to a cut in full year sales and comps growth guidance.

Details of the Quarter

Red Robin reported mixed first-quarter 2016 results with earnings outperforming the Zacks Consensus Estimate but revenues missing.

Earnings rose 15.5% year over year on higher revenues and growth in adjusted EBITDA. Revenues of $402 million grew 1.8% year over year. However, comps were weak in the quarter.

Company-owned restaurants’ comps declined 2.6% as against prior-quarter comps growth of 2.1% due to weak traffic trends. A 4.1% decline in traffic offset a 1.5% increase in average guest check.

Restaurant-level operating profit margin decreased 50 basis points (bps) to 22.5%. Adjusted EBITDA rose 8.5% to $51.0 million from $47 million in the first quarter of 2015.

Full-Year Guidance Lowered

Red Robin lowered its total revenue growth guidance for 2016 from the range of 8.5% to 9.5% to 8%.

The comps growth guidance was lowered to flat to slightly negative from the previous expectation of an increase in a low single digit range.

Adjusted EBITDA in 2016 is likely to range between $150 million and $155 million.

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

Stocks to Consider

Stocks which are better-ranked in the same sector are Carrols Restaurant Group, Inc. TAST, Dave & Buster's Entertainment, Inc. PLAY, and Restaurant Brands International Inc. QSR. All these stocks sport a Zacks Rank#1(Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
RED ROBIN GOURM (RRGB): Free Stock Analysis Report
 
CARROLS RESTRNT (TAST): Free Stock Analysis Report
 
RESTAURANT BRND (QSR): Free Stock Analysis Report
 
DAVE&BUSTRS ENT (PLAY): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research