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Category: Stock Market and HD Supply
Date: 11 June 2020 Stock Price: $14.54 We take a look at the 1st quarter earnings release of their 2020 fiscal year of Red Robin Gourmet Burgers, a franchise casual dining burger and beer joint that has over 560 stores across the United States and Canada.
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About Red Robin Gourmet Burgers
Red Robin Gourmet Burgers, Inc. (www.redrobin.com), a casual dining restaurant chain founded in 1969 that operates through its wholly-owned subsidiary, Red Robin International, Inc., and under the trade name, Red Robin Gourmet Burgers and Brews, is the Gourmet Burger Authority™, famous for serving more than two dozen craveable, high-quality burgers with Bottomless Steak Fries® in a fun environment welcoming to guests of all ages. At Red Robin, burgers are more than just something guests eat; they're a bonding experience that brings together friends and families, kids and adults. In addition to its many burger offerings, Red Robin serves a wide variety of salads, soups, appetizers, entrees, desserts and signature beverages. Red Robin offers a variety of options behind the bar, including its extensive selection of local and regional beers and innovative cocktails, earning the restaurant a VIBE Vista Award for Best Beer Program in a Multi-Unit Chain Restaurant. It's now easy to take Red Robin anywhere with online ordering for to-go, delivery, and Gourmet Burger Bar catering. There are more than 560 Red Robin restaurants across the United States and Canada, including those operating under franchise agreements
Overview of Red Robin Gourmet Burgers 1st quarter 2020 earnings report
The data below refers to the latest quarter unless specified otherwise
- Revenues: $306.065 million (down from $409.866 million from the same quarter of the previous year)
- Revenues decreased by -25.3% over the last 12 months
- Cost and expenses: $462.294 million (up from $406.465 million for the same quarter of the previous year)
- Cost and expenses increased by 13.7% over the last 12 months
- Net loss: -$174.3 million (down from $639 thousand for the same quarter of the previous year)
- Diluted earnings per share: -$13.51 (down from $0.05 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 12.903 million (down from 13.041 million for the same quarter of the previous year)
- PE ratio: Since the group is currently making a loss a PE ratio cannot be calculated
- Cash and cash equivalents: $88.920 million
- Cash and cash equivalents per share: $6.89
- Cash and cash equivalents makes up 47.2% of Red Robin Gourmet Burgers current market capital
- Cash and cash equivalents makes up 7.9% of Red Robin Gourmet Burgers total assets
- Inventories: $24.863 million (up from $26.424 million for the same quarter of the previous year)
- Inventories makes up 2.2% of Red Robin Gourmet Burgers total assets
- Accounts receivable: $10.263 million (down from $22.372 million for the same quarter of the previous year)
- Accounts receivable makes up 0.9% of Red Robin Gourmet Burgers total assets
- Total shareholders' equity of Red Robin Gourmet Burgers: $184.369 million
- Shareholders' equity per share: $14.29
- So Red Robin Gourmet Burgers is trading at 1.02 times the stockholders equity per share which is outside the expected range of between 2 and 4 times that most firms tend to trade at.
- For some perspective the average price to book value of firms in the S&P 500 is 3.7
Red Robins management commentary on their 1st quarter 2020 earnings report
GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--Jun. 10, 2020-- Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) ("Red Robin" or the "Company"), a full-service restaurant chain serving an innovative selection of high-quality gourmet burgers in a family-friendly atmosphere, today reported financial results for the quarter ended April 19, 2020.
Paul J.B. Murphy III, Red Robin’s President and Chief Executive Officer, said, "We entered 2020 with accelerating business momentum, generating positive comparable restaurant revenue of 3.7% and positive Guest counts of 0.9% through the end of our second fiscal period. However, the COVID-19 pandemic resulted in an immediate shift of our priorities, inclusive of pivoting to a 100% off-premise model, the preservation of liquidity and the reduction of costs amid the ongoing uncertainty."
Paul J.B. Murphy III, Red Robin’s President and Chief Executive Officer, said, "We entered 2020 with accelerating business momentum, generating positive comparable restaurant revenue of 3.7% and positive Guest counts of 0.9% through the end of our second fiscal period. However, the COVID-19 pandemic resulted in an immediate shift of our priorities, inclusive of pivoting to a 100% off-premise model, the preservation of liquidity and the reduction of costs amid the ongoing uncertainty."
"Since the onset of the health crisis, we have significantly improved our off-premise execution, resulting in a material improvement in Guest satisfaction scores. Comparable restaurant revenue trends have also shown continual improvement week by week, including (39.7)% for the week ending June 7th. Importantly, we have recently begun opening dining rooms with limited capacities of up to 50% in our largest and highest volume market on the West Coast. In total, we have re-opened approximately 270 dining rooms with disciplined health and safety protocols and our new hospitality model we call TGX. Sales are exceeding our expectations, accompanied by record high dine-in Guest satisfaction scores and continued, strong retention of our elevated off-premise sales. For the week ending June 7th, restaurants with open dining rooms generated total comparable restaurant revenue of (26.7)%, including off-premise sales of 40% of total food and beverage sales. The substantive actions the organization implemented has positioned us well to not only manage through these near-term challenging times, but to succeed in the long-term, post-COVID environment."
Actions in Response to COVID-19
The Company has taken the following actions to preserve liquidity, and enhance financial flexibility:
Outlook for 2020 and Guidance Policy
In light of the ongoing uncertainty regarding the duration and impact of the COVID-19 pandemic, the Company withdrew its 2020 and long-term financial outlook on April 1, 2020
Actions in Response to COVID-19
The Company has taken the following actions to preserve liquidity, and enhance financial flexibility:
- Temporarily closed dine-in services at substantially all Red Robin-operated restaurants while continuing to provide to-go, delivery, and catering choices and ensuring the continuity of the Company's supply chain;
- Temporarily closed 35 Company-owned restaurants. In connection with these closures, restaurant managers were furloughed or transferred to nearby operational restaurants when possible;
- Implemented enhanced health and safety protocols across the business, emergency sick pay for hourly Team Members, and telecommuting policies for nearly all corporate level employees;
- Significantly reduced restaurant level costs and general and administrative expenses, including reducing by 20 percent executive base salaries, Board member cash retainer fees, and restaurant support center and non-furloughed restaurant supervisory Team Member wages and salaries;
- Eliminated approximately 50 restaurant support center general and administrative positions;
- Reduced selling expense by pivoting from national media to digital in support of the Company's off-premise business;
- Postponed or eliminated all non-essential spending, including capital expenditures for previously planned growth and other projects, including the Company's continued rollout of Donatos®, restaurant refreshes, and IT projects; prior to the pandemic, the Company purchased Donato's equipment for the Seattle market, including approximately 40 restaurants. We currently plan to resume our roll out of Donato's in this legacy market by the end of the year;
- Drew down the remaining capacity under the Company's $300 million credit facility;
- Suspended share repurchases and terminated the Company's prearranged stock trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended; and
- Began to engage in constructive discussions with landlords regarding potential restructuring of lease payments.
Outlook for 2020 and Guidance Policy
In light of the ongoing uncertainty regarding the duration and impact of the COVID-19 pandemic, the Company withdrew its 2020 and long-term financial outlook on April 1, 2020
Red Robin Gourmet Burgers (NASDAQ: RRGB) stock price history
The image below obtained from Google shows the stock price history of Red Robin over the last 5 years. And its not been a good time for Red Robin stockholders. 5 years ago the stock was trading at $88 a stock and its currently trading at $14.54. Thats a significant loss of -83.4% over the last 5 years.
The stock of Red Robin is trading at closer to its 52 week low of $4.04 than it is to its 52 week high of $37.29 showing that short term sentiment and momentum towards Red Robin Gourmet Burgers is negative at this point in time.
The stock of Red Robin is trading at closer to its 52 week low of $4.04 than it is to its 52 week high of $37.29 showing that short term sentiment and momentum towards Red Robin Gourmet Burgers is negative at this point in time.
Recent coverage of Red Robin Gourmet Burgers
The extract below covers the latest regarding HD Supply as obtained from Fool.com
Shares of Red Robin Gourmet Burgers (NASDAQ:RRGB), a chain of burger restaurants, sank as much as 13% Wednesday after the company released slightly disappointing first-quarter results.
So what
In not-so-surprising news, Red Robin reported a tough first quarter thanks to the closure of many of its dine-in restaurants during the COVID-19 pandemic. Red Robin's non-GAAP (adjusted) per-share loss checked in at $6.66, far worse than analysts' forecast of $1.34 per share. Total revenue declined 25.3% from the prior year, driven by a 20.8% decline in comparable restaurant revenue and a 20.9% decline in comparable restaurant guest counts. The company was able to shift its focus, and off-premise sales increased 86%. Restaurant operating profit margin dropped 950 basis points to 8.8%
President and CEO Paul J. B. Murphy III had this to say in a press release: "Since the onset of the health crisis, we have significantly improved our off-premise execution, resulting in a material improvement in Guest satisfaction scores. Comparable restaurant revenue trends have also shown continual improvement week by week, including (39.7)% for the week ending June 7th. Importantly, we have recently begun opening dining rooms with limited capacities of up to 50% in our largest and highest volume market on the West Coast."
Read the full article here
Shares of Red Robin Gourmet Burgers (NASDAQ:RRGB), a chain of burger restaurants, sank as much as 13% Wednesday after the company released slightly disappointing first-quarter results.
So what
In not-so-surprising news, Red Robin reported a tough first quarter thanks to the closure of many of its dine-in restaurants during the COVID-19 pandemic. Red Robin's non-GAAP (adjusted) per-share loss checked in at $6.66, far worse than analysts' forecast of $1.34 per share. Total revenue declined 25.3% from the prior year, driven by a 20.8% decline in comparable restaurant revenue and a 20.9% decline in comparable restaurant guest counts. The company was able to shift its focus, and off-premise sales increased 86%. Restaurant operating profit margin dropped 950 basis points to 8.8%
President and CEO Paul J. B. Murphy III had this to say in a press release: "Since the onset of the health crisis, we have significantly improved our off-premise execution, resulting in a material improvement in Guest satisfaction scores. Comparable restaurant revenue trends have also shown continual improvement week by week, including (39.7)% for the week ending June 7th. Importantly, we have recently begun opening dining rooms with limited capacities of up to 50% in our largest and highest volume market on the West Coast."
Read the full article here
Red Robin Gourmet Burgers (NASDAQ: RRGB) latest stock valuation
So what is Red Robin Gourmet Burgers stock worth after the release of their 1st quarter 2020 earnings report? Based on RRGB's latest earnings report and the fact that they are loss making we value to stock of RRGB at their stockholders equity per share. We therefore value Red Robin Gourmet Burgers at $14.20 a stock. We therefore feel the stock of Red Robin Gourmet Burgers is fully valued at its current price.
We usually recommend that long term fundamental and value investors look to enter a stock at least 10% below our target price which in this case is $14.20. We see a good entry point into the stock of Red Robin Gourmet Burgers at $12.80 or below.
We expect the stock of Red Robin Gourmet Burgers to trade in a narrow range around its current price in coming weeks and months.
We usually recommend that long term fundamental and value investors look to enter a stock at least 10% below our target price which in this case is $14.20. We see a good entry point into the stock of Red Robin Gourmet Burgers at $12.80 or below.
We expect the stock of Red Robin Gourmet Burgers to trade in a narrow range around its current price in coming weeks and months.
Next earnings release of Red Robin Gourmet Burgers
It is expected that Red Robin will release their 2nd quarter 2020 earnings report in early September 2020