Red Robin Gourmet Burgers Inc. (RRGB, Financial) filed Quarterly Report for the period ended 2010-07-11.
Red Robin Gourmet Burgers Inc. has a market cap of $307.2 million; its shares were traded at around $19.67 with a P/E ratio of 16.4 and P/S ratio of 0.4. Red Robin Gourmet Burgers Inc. had an annual average earning growth of 14.2% over the past 10 years.RRGB is in the portfolios of Chuck Royce of Royce& Associates, Bruce Kovner of Caxton Associates.
· Labor. Labor costs as a percentage of restaurant revenue increased 0.9% and 1.0% for the twelve and twenty-eight weeks ended July 11, 2010, as compared to the same period 2009 primarily due to reduced productivity in hourly labor costs as we increased staffing to accommodate the increased guest counts generated from our media campaigns as well as increased wages and training expense for our restaurant managers. We believe that our LTO promotions increased our labor expenses as a percentage of revenue by approximately 0.2% for the second quarter and approximately 0.4% year-to-date.
· Food Cost. For the twelve and twenty-eight weeks ended July 11, 2010, we saw an increase in the cost of ground beef and produce compared to 2009 prices. Additionally, we believe that our LTO promotions increased our cost of goods sold as a percentage of revenue by approximately 0.1% for the second quarter and approximately 0.3% for the year-to-date. Our ground beef was bought on the spot market in the second quarter of 2010 and ran above our second quarter 2009 pricing. We expect ground beef prices to decline in the remainder of 2010, but will still trend above the 2009 prices. We also experienced increased produce prices early in the second quarter due to inclement weather earlier in the year in produce growing states.
the second quarter 2010. This decrease was primarily the result of a 2.1% decrease in the average guest check. Offsetting this decrease was a 0.9% increase in guest counts for the second quarter of 2010. This increase, we believe, was driven by our LTO promotion and the three weeks of television media support. During the first eight weeks of second quarter, before our LTO campaign, guest counts and comparable restaurant sales were down approximately 1.0% and 2.6%, respectively, as compared to the same period in 2009. During the four weeks of the LTO and national cable television advertising campaign, guest counts and comparable restaurant sales were up approximately 4.7% and 1.6% respectively, as compared to the same period in 2009. Sales for non-comparable restaurants contributed an increase of $3.3 million.
Restaurant revenue for the twenty-eight week period ended July 11, 2010, increased $924,000 or 0.2% from the same period in 2009. Sales in our comparable restaurant base experienced a sales decrease of approximately $12.7 million or 2.8% for the period. This was primarily the result of a decrease in the average guest check offset by an increase in guest counts. Sales for non-comparable restaurants contributed an increase of $13.6 million, of which $5.1 million was attributable to the four restaurants opened during the twenty-eight weeks ended July 11, 2010, and $8.2 million attributable to additional sales from those restaurants opened in 2008 and 2009 and remain in the non-comparable base.
Franchise royalties and fees, which consist primarily of royalty income and initial franchise fees, increased 1.4% and 0.8% for the twelve and twenty-eight weeks ended July 11, 2010, respectively. This increase is primarily attributable to the increase in the number of franchised units. Our franchisees reported that comparable restaurant sales decreased 2.0% for U.S. restaurants and increased 0.8% for Canadian restaurants for the second quarter of 2010 compared to the second quarter of 2009. For the twenty-eight weeks ended July 11, 2010, our franchisees reported that comparable restaurant sales for U.S. restaurants decreased 2.1% and Canadian restaurants increased 3.0% from the twenty-eight week period ended July 12, 2009.
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Red Robin Gourmet Burgers Inc. has a market cap of $307.2 million; its shares were traded at around $19.67 with a P/E ratio of 16.4 and P/S ratio of 0.4. Red Robin Gourmet Burgers Inc. had an annual average earning growth of 14.2% over the past 10 years.RRGB is in the portfolios of Chuck Royce of Royce& Associates, Bruce Kovner of Caxton Associates.
Highlight of Business Operations:
· Comparable Restaurant Sales. For the twelve weeks ended July 11, 2010, the 290 restaurants in our current comparable base experienced a 1.2% decrease in sales from these same restaurants last year. This decrease was driven by a 2.1% decrease in the average guest check partially offset by a 0.9% increase in guest counts. For the twenty-eight weeks ended July 11, 2010, the restaurants in our current comparable based experienced a 1.8% decrease in sales from these same restaurants last year. This decrease was driven by a 2.2% decrease in the average guest check partially offset by a 0.4% increase in guest counts. For the second quarter 2010, we believe the restaurant sales results were negatively impacted by lower restaurant sales in California and Arizona, which have been more heavily impacted by macroeconomic factors. Excluding the impact from our comparable restaurants in these markets, comparable restaurant sales would have been approximately 1.5% higher, or 0.3%, while our guest counts would have been positive 2.5%. Our 72 restaurants in California and Arizona represent 25% of our total company-owned comparable restaurants in the second quarter 2010.· Labor. Labor costs as a percentage of restaurant revenue increased 0.9% and 1.0% for the twelve and twenty-eight weeks ended July 11, 2010, as compared to the same period 2009 primarily due to reduced productivity in hourly labor costs as we increased staffing to accommodate the increased guest counts generated from our media campaigns as well as increased wages and training expense for our restaurant managers. We believe that our LTO promotions increased our labor expenses as a percentage of revenue by approximately 0.2% for the second quarter and approximately 0.4% year-to-date.
· Food Cost. For the twelve and twenty-eight weeks ended July 11, 2010, we saw an increase in the cost of ground beef and produce compared to 2009 prices. Additionally, we believe that our LTO promotions increased our cost of goods sold as a percentage of revenue by approximately 0.1% for the second quarter and approximately 0.3% for the year-to-date. Our ground beef was bought on the spot market in the second quarter of 2010 and ran above our second quarter 2009 pricing. We expect ground beef prices to decline in the remainder of 2010, but will still trend above the 2009 prices. We also experienced increased produce prices early in the second quarter due to inclement weather earlier in the year in produce growing states.
the second quarter 2010. This decrease was primarily the result of a 2.1% decrease in the average guest check. Offsetting this decrease was a 0.9% increase in guest counts for the second quarter of 2010. This increase, we believe, was driven by our LTO promotion and the three weeks of television media support. During the first eight weeks of second quarter, before our LTO campaign, guest counts and comparable restaurant sales were down approximately 1.0% and 2.6%, respectively, as compared to the same period in 2009. During the four weeks of the LTO and national cable television advertising campaign, guest counts and comparable restaurant sales were up approximately 4.7% and 1.6% respectively, as compared to the same period in 2009. Sales for non-comparable restaurants contributed an increase of $3.3 million.
Restaurant revenue for the twenty-eight week period ended July 11, 2010, increased $924,000 or 0.2% from the same period in 2009. Sales in our comparable restaurant base experienced a sales decrease of approximately $12.7 million or 2.8% for the period. This was primarily the result of a decrease in the average guest check offset by an increase in guest counts. Sales for non-comparable restaurants contributed an increase of $13.6 million, of which $5.1 million was attributable to the four restaurants opened during the twenty-eight weeks ended July 11, 2010, and $8.2 million attributable to additional sales from those restaurants opened in 2008 and 2009 and remain in the non-comparable base.
Franchise royalties and fees, which consist primarily of royalty income and initial franchise fees, increased 1.4% and 0.8% for the twelve and twenty-eight weeks ended July 11, 2010, respectively. This increase is primarily attributable to the increase in the number of franchised units. Our franchisees reported that comparable restaurant sales decreased 2.0% for U.S. restaurants and increased 0.8% for Canadian restaurants for the second quarter of 2010 compared to the second quarter of 2009. For the twenty-eight weeks ended July 11, 2010, our franchisees reported that comparable restaurant sales for U.S. restaurants decreased 2.1% and Canadian restaurants increased 3.0% from the twenty-eight week period ended July 12, 2009.
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