Red Robin Q2 Sales Miss Expectations, Shares Drop

Shares of

dipped more than 8 percent in pre-market trading after the company reported weaker-than-expected revenue for the second quarter. The Greenwood Village, Colorado-based company reported quarterly net income of $11.2 million, or $0.78 per share, compared to $9.5 million, or $0.65 per share, in the year-ago period. Its adjusted earnings came in at $0.78 per share. Its revenue climbed 14.4 percent year-over-year to $293 million. However, analysts were expecting earnings of $0.78 per share on revenue of $297.95 million. The average estimate among 11 Estimize users was for earnings of $0.80 per share and revenue of $299.15 million. Comparable restaurant revenue climbed 2.9 percent for the quarter. System-wide restaurant revenue (including franchised units) surged to $363.2 million from $341.5 million. Selling expenses increased to $11.1 million, from $9.9 million. Restaurant-level operating profit margin expanded to 22.5 percent in the second quarter,versus 22.2 percent in the year-ago quarter. As of July 12, 2015, Red Robin had cash and cash equivalents of $22.6 million and total debt of $145.1 million. "We continue to be pleased with the progress we are making toward a best in class brand experience. Our guests are choosing to visit us more frequently and they are trading up to our newest burgers and beers," said Steve Carley, Red Robin Gourmet Burgers, Inc. chief executive officer. "As a result, we have now outperformed the casual dining industry in reported comparable sales for the last four years and outpaced them on traffic by over 200 basis points during the second quarter." For fiscal year 2015, Red Robin projects revenue growth near 12 percent and comparable revenue to rise around 3.0 percent. The company also plane to open 20 new Red Robin Restaurants and 3 to 5 Red Robin Burger Works in the year. Red Robin shares fell 8.28 percent to $81.00 in pre-market trading.