Red Robin Gourmet Burgers downgraded to hold vs. buy at Canaccord

red robin gourmet burgers downgraded to hold vs buy at canaccord
Red Robin Gourmet Burgers downgraded to hold vs. buy at Canaccord

Red Robin Gourmet Burgers shares plummet 24% after profit warning

Red Robin Gourmet Burgers Inc. shares plummeted nearly 24% in Thursday premarket trading after the restaurant chain gave a second-quarter profit warning, putting the company on track for the lowest open in 5 1/2 years. Red Robin expects to report a loss of 14 cents, driven by a 54-cents asset impairment charges, and adjusted earnings of 46 cents. Revenue is expected to total $315.4 million. The FactSet consensus as of July 31 had been for earnings of 65 cents and revenue of $323.6 million. Same-store sales are expected to decrease 2.6%, compared with a FactSet forecast for a 0.6% decline, as of July 31. “While we remain confident in the strategy that we have in place to address the shifts going on within casual dining, we simply didn’t execute as well as we should have,” said Denny Marie Post, Red Robin Gourmet Burgers, Inc., chief executive officer. The company has not seen the boost in dine-in traffic to offset the lower check average that is accompanying the Tavern Double Menu, Post said. Service has been impacted by the “growing complexity of multiple revenue streams” and the company needs to refresh its marketing and improve its digital experience. Red Robin will announce its second-quarter results after hours on August 21. Red Robin shares have fallen 18.7% for the year so far while the S&P 500 index has gained 5.2% for the period.

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