Restaurant chain Red Robin Gourmet Burgers (RRGB) saw its shares plunge 18% in the early hours of trading today, triggered by the lower-than-expected first quarter results it reported after market close on Tuesday. The stock, which increased 9% since its fourth quarter earnings announcement, clocked a new six-month low when the market opened today.
Sales inched up 0.2% year-over-year to $421.5 million, while GAAP earnings tanked 62% to $0.34 per share and adjusted EPS plunged 22% to $0.69. Comparable restaurant revenue dropped 0.9% and the guest count was up a mere 0.1% in the recently ended quarter.
Red Robin anticipates its second quarter 2018 earnings to range from $0.55 to $0.75 per share. The Colorado-based burger maker opened four Red Robin restaurants and its franchisee opened one restaurant during the quarter. The company plans to open four restaurants and its franchisees will open three for the balance of 2018.
With record low unemployment rate and favorable consumer confidence boosting the US economy, the restaurant industry is expected to perform well in the near term. “We are taking steps to improve sales and traffic trends while continuing to make strides on productivity, which is critical to ensure we can deliver great service and value despite rising costs,” said CEO Denny Marie Post.