Red Robin Reports Decline in Revenue and Increased Net Losses for Third Quarter and Year-to-Date

Red Robin Gourmet Burgers, Inc. reported its financial results for the twelve and forty weeks ended October 6, 2024, revealing a decline in revenue and increased net losses compared to the previous fiscal period. Total revenues for the twelve weeks were $274.6 million, a decrease of 1.1% from $277.6 million in the same period last year. For the forty weeks, total revenues fell to $963.3 million, down 3.1% from $994.0 million. Restaurant revenue specifically decreased by 0.9% for the quarter and 3.0% year-to-date, reflecting challenges in guest counts despite a 4.9% increase in average guest checks attributed to menu price increases.

The company reported a net loss of $18.9 million for the third quarter, compared to a loss of $8.2 million in the same quarter of the previous year. Year-to-date, the net loss reached $37.8 million, significantly higher than the $7.5 million loss reported for the same period in fiscal 2023. The basic loss per share for the quarter was $(1.20), compared to $(0.52) in the prior year.

Operating costs also reflected a challenging environment, with total restaurant operating costs for the quarter increasing by 1.5% to $246.4 million. Labor costs as a percentage of restaurant revenue rose significantly, driven by strategic investments and increased hourly labor costs. The company also faced higher occupancy costs due to fixed rents from recent sale-leaseback transactions.

Strategically, Red Robin has made adjustments to its operations, including the re-launch of its loyalty program, which has seen membership grow to 14.5 million. The company completed a sale-leaseback transaction for ten restaurants, generating net proceeds of approximately $23.3 million and a gain of $7.4 million. However, the company incurred costs related to a reduction in force and recognized non-cash impairment charges for the closure of several locations.

As of October 6, 2024, Red Robin had total assets of $669.4 million and total liabilities of $722.8 million, resulting in a stockholders' equity deficit of $53.3 million. The company’s liquidity position included $30.3 million in cash and cash equivalents, alongside $20.0 million available under its credit facility. The company has amended its credit agreement to increase revolving commitments and extend financial covenants, providing some relief amid ongoing operational challenges.