Fast-food chain Red Robin Gourmet Burgers (NASDAQ: RRGB) reported a marked increase in its second-quarter adjusted earnings, despite a decline in revenues. The results exceeded analysts’ consensus estimate.
The Greenwood Village, Colorado-based company reported earnings of $1.03 per share for the most recent quarter, on an adjusted basis, which is sharply higher than last year’s profit of $0.46 per share. Unadjusted earnings were $0.98 million or $0.08 per share, compared to a loss of $1.87 million or $0.14 per share in the second quarter of 2018. The bottom-line came in above the Street view.
There was a 2.3% year-over-year decline in total revenues to $308 million during the three-month period, which however surpassed the consensus forecast. Comparable restaurant revenue decreased 1.5% and comparable restaurant guest counts dipped 6.4%, which was partially offset by a 5% growth in average guest check aided by improved menu mix and pricing. Off-premise sales, which account for about 13% of total food and beverage sales, increased 26%.
During the quarter, cost of sales as a percentage of restaurant revenue decreased by 20 basis points.
“We are making important progress on the execution of the five pillars in our strategic plan, designed to restore Red Robin’s growth and improve profitability, and believe we have reached an inflection point in our transformation,” said Pattye Moore, interim CEO.
Last month, McDonald’s (MCD) reported in-line earnings amid a 6.5% rise in comparable-store sales. While earnings grew 4% annually to $1.97 per share, revenues were unchanged year-over-year at $5.34 billion.
Red Robin shares have declined consistently in the past several years and slipped to a near-eight-year low a few months ago. The stock has gained 23% so far this year. The company’s stock closed the last trading session lower but gained in the early hours of Friday’s session.