What happened

Shares of gourmet burger chain Red Robin (NASDAQ:RRGB) have plunged today, down by 20% as of 11:30 a.m. EDT, after the company reported preliminary second-quarter earnings. The results were "significantly lower than expected," CEO Denny Marie Post said.

So what

Revenue in the second quarter should be approximately $315.4 million, with comparable-restaurant revenue declining by 2.6%. Comparable-guest count decreased by 0.7%. During the quarter, Red Robin recognized $0.54 per share in asset impairment charges and $0.06 per share in reorganization and other charges, leading to a GAAP net loss of $0.14 per share. On a non-GAAP basis, adjusted earnings per share came in at $0.46.

A Red Robin restaurant exterior

Image source: Red Robin.

Analysts were expecting sales of $323.6 million and adjusted earnings per share of $0.65. The results are preliminary estimates and may change slightly, and the company will officially report earnings on Aug. 21.

Now what

Post said in a statement:

We are disappointed with our performance in the second quarter. Consistent with our commitment to providing timely disclosure and transparency, we are announcing preliminary results for our second quarter today because they are significantly lower than expected. 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. We continue to make progress on driving off-premise traffic growth and differentiation through everyday affordability. However, we have yet to see the needed lift in dine-in traffic to offset the lower check average associated with the higher mix of our Tavern Double Menu.

In terms of guidance for full-year 2018, Red Robin is forecasting total revenue in the range of $1.35 billion to $1.365 billion, with comps declining by 1% to 2%. Earnings per share for the year is expected to be in the range of $1.80 to $2.20.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of Red Robin Gourmet Burgers and has the following options: short September 2018 $50 calls on Red Robin Gourmet Burgers. The Motley Fool has a disclosure policy.