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Burger restaurant chain Red Robin (NASDAQ:RRGB) beat analysts’ expectations in Q2 CY2024, with revenue flat year on year at $300.2 million. The company expects the full year’s revenue to be around $1.25 billion, in line with analysts’ estimates. It made a non-GAAP loss of $0.47 per share, down from its loss of $0.24 per share in the same quarter last year.
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Red Robin (RRGB) Q2 CY2024 Highlights:
- Revenue: $300.2 million vs analyst estimates of $292.3 million (2.7% beat)
- Adjusted EBITDA: $11.8 million vs analyst estimates of $12.3 million (4.1% miss)
- EPS (non-GAAP): -$0.47 vs analyst estimates of -$0.46
- The company dropped its revenue guidance for the full year to $1.25 billion at the midpoint from $1.26 billion, a 1% decrease
- EBITDA guidance for the full year is $42.5 million at the midpoint, below analyst estimates of $52.61 million
- Gross Margin (GAAP): 13.5%, in line with the same quarter last year
- EBITDA Margin: 3.9%, down from 5.2% in the same quarter last year
- Same-Store Sales were flat year on year (1.5% in the same quarter last year)
- Market Capitalization: $79.21 million
Known for its bottomless steak fries, Red Robin (NASDAQ:RRGB) is a chain of casual restaurants specializing in burgers and general American fare.
Sit-Down DiningSit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.
Sales GrowthRed Robin is larger than most restaurant chains and benefits from economies of scale, giving it an edge over its smaller competitors.
As you can see below, the company’s revenue was flat over the last five years as it closed restaurants.
This quarter, Red Robin reported decent year-on-year revenue growth of 0.5%, and its $300.2 million in revenue topped Wall Street’s estimates by 2.7%. Looking ahead, Wall Street expects revenue to remain flat over the next 12 months, a deceleration from this quarter.
Same-Store SalesA company’s same-store sales growth shows the year-on-year change in sales for its restaurants that have been open for at least a year, give or take. This is a key performance indicator because it measures organic growth and demand.
Red Robin’s demand within its existing restaurants has barely risen over the last eight quarters. On average, the company’s same-store sales growth has been flat.
In the latest quarter, Red Robin’s year on year same-store sales were flat. By the company’s standards, this growth was a meaningful deceleration from the 1.5% year-on-year increase it posted 12 months ago. We’ll be watching Red Robin closely to see if it can reaccelerate growth.
Key Takeaways from Red Robin’s Q2 Results Although revenue beat, adjusted EBITDA missed expectations and margin declined year on year. Guidance was bad and a big reason why shares are down. The company lowered its full-year revenue guidance and adjusted EBITDA guidance for the same period missed expectations. Overall this was a weak quarter. Shares traded down 13.1% to $4.12 immediately after reporting.
