In This Article:
Release Date: May 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Red Robin Gourmet Burgers Inc (NASDAQ:RRGB) reported a 3.1% increase in comparable restaurant revenue, driven by a 6.8% increase in net menu prices.
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The company achieved a restaurant-level operating profit margin of 14.3%, an increase of 330 basis points compared to the previous year.
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The revamped Red Robin royalty program has continued to spur membership growth, reaching approximately 15.3 million members.
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Adjusted EBITDA increased to $27.9 million, up by $14.5 million from the previous year, due to cost efficiency gains and menu price increases.
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The company successfully reduced debt by approximately $17.8 million using free cash flow and proceeds from monetizing properties.
Negative Points
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Guest traffic declined by 3.5%, indicating a challenge in attracting more customers despite price increases.
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The company has revised its revenue guidance for 2025 to $1.21 to $1.23 billion, down from the prior guidance of $1.225 to $1.25 billion.
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There is an expectation of a 240 basis point headwind in the second quarter of 2025 due to the non-recurrence of loyalty revenue benefits from the previous year.
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The company anticipates absorbing cost headwinds from current tariff policies without further menu price increases in 2025.
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Red Robin Gourmet Burgers Inc (NASDAQ:RRGB) plans to close 14 restaurants by the end of the year, reflecting ongoing challenges in certain locations.
Q & A Highlights
Q: Can you explain the factors behind maintaining the full-year guidance for restaurant-level margins despite the strong Q1 profitability? A: Todd Wilson, CFO, explained that the strong Q1 results were primarily due to faster-than-expected progress in labor efficiency. However, the full-year guidance remains cautious due to anticipated traffic declines and tariff pressures. The company is taking a prudent approach to ensure they meet their guidance despite these challenges.
Q: How is the menu price contribution expected to change throughout the year? A: Todd Wilson, CFO, noted that the menu price contribution was nearly 7% in Q1 and is expected to decrease as the year progresses. The company does not plan any further pricing actions this year, with expected check growth of about 4% in Q2 and Q3, and around 2% in Q4.
Q: What are the results and future opportunities of the revamped loyalty program? A: GJ Hart, former CEO, and Dave Pace, CEO, both highlighted that the loyalty program is performing well, with 22% of visits from lapsed users and 20% from new guests. They see significant opportunities to further leverage the program to drive guest frequency and engagement.