Please ensure Javascript is enabled for purposes of website accessibility

Red Robin's First-Quarter Loss Per Share Is 6 Times Greater Than Analysts Expected

By Howard Smith – Jun 10, 2020 at 11:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

But the restaurant chain says sales in reopened locations are exceeding expectations.

Red Robin Gourmet Burgers (RRGB 7.57%) 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. 

gourmet burgers with peppers flipping above grilling flames

Image source: Getty Images.

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. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Red Robin Gourmet Burgers, Inc. Stock Quote
Red Robin Gourmet Burgers, Inc.
$6.68 (7.57%) $0.47

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.