Red Robin Gourmet Burgers (RRGB) Q3 2024 earnings summary

Executive summary

• Third quarter total revenues were $274.6 million, down $2.9 million year-over-year, with comparable restaurant revenue up 0.6% and a net loss of $18.9 million compared to $8.2 million loss last year.

• Loyalty 2.0 relaunch and targeted promotions increased guest engagement, with membership growing to 14.5 million and OSAT scores at their highest since 2016.

• Strategic shift away from deep discounting to value-driven, experiential promotions, supporting improved guest satisfaction and traffic trends.

• Management remains focused on executing the North Star Plan for sustainable long-term growth despite macroeconomic headwinds.

Financial highlights

• Restaurant revenue for Q3 2024 was $270.6 million, down 0.9% year-over-year; franchise revenue was $3.0 million, down 12%.

• Comparable restaurant revenue increased 0.6% in Q3, driven by a 4.9% increase in average guest check, offset by a 4.3% decrease in guest count.

• Restaurant-level operating profit margin was 9.0% in Q3, down from 11.1% last year; adjusted EBITDA was $2.1 million, down from $6.8 million.

• Q3 net loss was $18.9 million ($1.20 per diluted share), compared to $8.2 million loss ($0.52 per share) in Q3 2023.

• Ended Q3 with $22 million in cash, $8.3 million in restricted cash, and $20 million in available credit.

Outlook and guidance

• Fiscal 2024 total revenue expected to be approximately $1.25 billion, with restaurant-level operating profit margin projected at least 10.5%.

• Adjusted EBITDA guidance for 2024 is $35.0 million to $37.5 million.

• Capital expenditures for 2024 expected at ~$25 million.

• Q4 expectations: traffic down ~4%, PPA up ~6%, $4.5 million reduction in loyalty revenue, and $25 million sales reduction due to a shorter fiscal quarter.

• Management expects future cash flows, borrowing capacity, and cash on hand to be sufficient to meet anticipated cash requirements and fund capital expenditures over the next 12 months.