Gourmet burger chain Red Robin (NASDAQ:RRGB) has had a tough run recently, as revenue, earnings per share, comparable restaurant sales, and guest counts have all been in decline. While the company has been taking action to address underlying problems by making efforts to improve marketing messaging and service execution at peak demand hours, management has said it will take time for these initiatives to begin bearing fruit.

Sure enough, Red Robin's third-quarter results remained unimpressive, so investors will have to keep waiting to see whether the company's efforts to reinvigorate its business will pay off in Q4 and beyond.

Red Robin Gourmet Burgers restaurant.

Image source: Red Robin Gourmet Burgers.

Red Robin's third-quarter results: The raw numbers

Metric

Q3 2018

Q3 2017

Change (YOY)

Revenue

$294.9 million

$305.7 million

(3.5%)

Adjusted EPS*

$0.16

$0.21

(23.8%)

*Earnings per share is adjusted to exclude reorganization costs. Data source: Red Robin Gourmet Burgers third-quarter earnings release.

Third-quarter highlights

  • Red Robin's revenue fell 3.5% year over year to $294.9 million.
  • Comparable restaurant revenue was down 3.4% in constant currency, steeper than the key metric's 3.4% decrease in Q2. 
  • Average guest checks were down 1.5% year over year.
  • Guest counts declined 1.9% year over year.
  • Earnings per share was $0.13, or $0.16 when adjusted to exclude reorganization costs.

What management had to say

"Our third quarter sales performance was the result of a decline in dine-in traffic, which we expected when we chose mid quarter to shift remaining media weight to later in the year," said Red Robin CEO Denny Marie Post in the company's third-quarter earnings release. In addition, Post said the company started retraining all of its restaurant teams for improved peak-hour service during the last part of the third quarter.

Post noted that the company is "already seeing improvements in ticket and wait times" as a result of its retraining efforts.

Looking forward

Red Robin is hopeful its business can return to growth, but there's still uncertainty about the timing of this turnaround.

"By refreshing our marketing plans and improving service execution, we firmly believe we can get back to where we all want and need to be, although how long that will take is not entirely clear," Post said during the company's third-quarter earnings call. "As it stands, we do not expect to see meaningful same-store sales trend improvement in Q4 over Q3."

Red Robin lowered its outlook for full-year 2018 earnings per share, guiding for the key metric to be between $1.60 and $1.80. This is down from a previous forecast for earnings per share during the period to be between $1.80 and $2.20.

Daniel Sparks 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 December 2018 $40 calls on Red Robin Gourmet Burgers. The Motley Fool has a disclosure policy.