Factors Setting the Tone for Red Robin (RRGB) Earnings in Q1

Zacks Equity Research

Red Robin Gourmet Burgers, Inc. RRGB is likely to witness an earnings decline when the company reports first-quarter fiscal 2020 results. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 24.1%.

Q1 Expectations

The Zacks Consensus Estimate for loss in the fiscal first quarter is pegged at $1.51 per share. Meanwhile, the company delivered earnings per share of 19 cents in the prior-year quarter. Notably, the company’s estimates remained stable over the past 30 days. 

For revenues, the consensus mark stands at nearly $310 million, implying a 24.4% decline from the prior-year quarter’s reported figure. 

Let’s delve deeper to find out how the company’s top and the bottom line will shape up in the upcoming quarterly release.

Factors at Play

In the fiscal first quarter, Red Robin’s top and bottom lines are likely to have witnessed a negative impact of the coronavirus pandemic. Although the company’s preliminary comparable restaurant revenues were down 20.8% for the quarter ended Apr 19, 2020, in the first eight weeks of the same period, comps inched up 3.7%. However, in the last eight weeks of the quarter under review, comps plunged 43.2% due to the pandemic-led crisis. Comparable restaurant guest counts fell 20.9% as well.

On the flip side, the company’s off-premise sales are expected to have seen a sharp increase from its pre-COVID-19 levels. Notably, reduction in menu items along with enhancement of online food ordering website improved speed and accuracy of service. Moreover, intensified focus on car-side and home delivery options including Red Robin Delivery bettered guest experience alongside the economics of the company’s off-premise business model.

Red Robin Gourmet Burgers, Inc. Price and EPS Surprise

Red Robin Gourmet Burgers, Inc. Price and EPS Surprise

Red Robin Gourmet Burgers, Inc. price-eps-surprise | Red Robin Gourmet Burgers, Inc. Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict a beat for Red Robin this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Red Robin has an Earnings ESP of 0.00% and a Zacks Rank #3, which makes the surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

Domino's Pizza, Inc. DPZ reported first-quarter 2020 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings in the quarter under review came in at $3.07 per share, which outpaced the consensus mark of $2.29. The bottom line also improved 39.5% on a year-over-year basis. Further, quarterly revenues of $873.1 million beat the consensus mark of $867 million and rose 4.4% year over year as well.

Yum China Holdings, Inc. YUMC delivered better-than expected first-quarter 2020 results. Adjusted earnings came in at 16 cents per share. The Zacks Consensus Estimate was of a loss of 25 cents. However, the reported figure decreased 72.9% from the year-ago quarter. The company’s total revenues of $1,754 million beat the consensus mark of $1,145 million in first-quarter 2020. However, the metric deteriorated 23.9% year over year.

BJs Restaurants Inc BJRI reported first-quarter 2020 results wherein the bottom line outpaced the consensus mark but the top line missed the same. Adjusted loss (excluding an impairment charge of 12 cents) of 10 cents per share was narrower than the Zacks Consensus Estimate of a loss of 38 cents. However, in the year-ago period, the company reported adjusted earnings of 62 cents per share. Total quarterly revenues of $254.6 million lagged the consensus estimate of $261.7 million by 2.7%. The top line also fell 12.4% year over year.

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