The Red Robin earnings report released, resulting in the company’s shares tanking over 20% today. Shares of Red Robin are closely on track today for the lowest close since February 2013.
Red Robin (NASDAQ:RRGB) Stock Sinks
The stock was downgraded by two analysts’ groups after Red Robin issued a second-quarter profit warning.
According to Yahoo Finance, Red Robin stock closed the market yesterday at $45.850 a share and opened today at $36.20. That’s a -21.04% decrease in its stock to start the day. At press time, RRGB is trading at $36.91 a share, down -$8.91 (-19.47%). The stock’s 52-week high was at $70.10 a share, and its 52-week low was $36.20.
Restaurant Struggles
The company’s sales are around $315.4 million, which is down from its $315.8 million last year. Denny Marie Post, Red Robin’s CEO, said in a statement to MarketWatch:
“We are disappointed with our performance in the second quarter. While we remain confident in the strategy that we have in place to address the shifts going on within casual dining, we simply didn’t execute as well as we should have. [W]e have yet to see the needed lift in dine-in traffic to offset the lower check average associated with the higher mix of our Tavern Double Menu.”
In previous quarters, the large restaurant chain has suffered from competitor promotions. The company, in the past, had been rethinking its dining platform to stand out from the rest.
Many of the other competitive chains hold much larger advertising budgets, something that currently holds back Red Robin.
“[G]iven cuts to labor and management’s comment about service, we believe it possible that labor cuts went too deep in a very competitive environment,” analysts led by Lynne Collier wrote. “This could result in the company possibly having to reinvest back into labor.”
We will see what the chain decides to do moving into the third quarter. Red Robin’s Q3 earnings should be made available to the public after hours on August 21st.
What did you think about the Red Robin earnings report for Q2?
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