Red Robin Gourmet Burgers (RRGB) stock inched down over 10% in the after-market session following lower-than-expected revenue for the third quarter. The top line remained hurt by dine-in traffic, lower average guest check and a decline in guest counts. However, the bottom line came in ahead of analysts’ expectations.
Net income dropped 37% to $1.71 million and earnings plunged 38% to $0.13 per share. Adjusted earnings fell 23.8% to $0.16 per share.
Total revenue declined 3.5% to $294.9 million due to a decrease in dine-in traffic. The top line was hurt by a decline in comparable restaurant revenue, a decline from closed restaurants and an unfavorable foreign currency exchange impact. Comparable restaurant revenue decreased 3.4%, due to a 1.5% decline in average guest check and a 1.9% decline in guest counts.
Looking ahead into the full year 2018, the company expects earnings in the range of $1.60 to $1.80 per share.
For the third quarter, restaurant-level operating profit margin fell to 16.8% from 18.6% in the previous year quarter. This was due to rises in real estate and personal property tax, sales deleverage and increase in restaurant technology, equipment repairs and maintenance, third-party delivery fees, and utility costs.
During the third quarter of 2018, the company opened two Red Robin restaurants and its franchisees opened one Red Robin restaurant.
As of October 7, 2018, the company had cash and cash equivalents of $20.4 million and total debt of $220.9 million, excluding $10.4 million of capital lease liabilities.
Shares of Red Robin Gourmet ended Tuesday’s regular session up 1.94% at $33.14 on the Nasdaq. The stock has fallen over 50% in the past year and over 41% in the year so far.