Red Robin Gourmet Burgers (NASDAQ:RRGB) reported results today for its fiscal first quarter ended April 19, 2020, and adjusted net losses were much higher than analysts expected. Consensus estimates were for a loss of $1.10 per share, according to CNBC. But actual results came in with a loss of $6.66 per diluted share, after adjusting for additional impairment and litigation charges.
The large loss stemmed from a variety of factors driven by impacts from the COVID-19 pandemic. Total revenue was down by 25.3%, and comparable restaurant sales were down 20.8% versus the year-ago period. Additional costs included higher ground beef prices, higher labor costs relative to sales, increased wage rates and insurance costs, and an increase in third-party delivery fees driven by the off-premise sales prompted by COVID-19 restrictions.
CEO Paul Murphy expressed optimism from the quarterly results. After operating on a 100% off-premise basis, restaurants have started opening for dine-in with limited capacity. Murphy said, "comparable restaurant revenue trends have also shown continual improvement week by week, including (39.7)% for the week ending June 7th." This represents a sequential improvement for the seventh straight week since the current fiscal quarter began.
The company reports that approximately 65% of its company-owned restaurants are now open for dine-in with capacity limitations. It noted tthat off-premise sales from these reopened restaurants are still approximately one and a half to two times higher than they were before the company pivoted away from dine-in sales due to COVID-19.