Q2 2026 Red Robin Gourmet Burgers Inc Earnings Call Transcript
Key Points
- Same-store sales grew 1.3% in Q2 with traffic effectively flat, marking the best traffic performance since Q1 2023 and outperforming the industry by 40 basis points.
- Restaurant-level operating margin increased 20 basis points to 14.7%, the highest second-quarter margin in four years, driven by labor efficiency savings of approximately 50 basis points.
- Announced three refranchising agreements expected to generate approximately $96 million in gross proceeds, which will be used to pay down debt and strengthen the balance sheet.
- Big Yum! value platform continues to drive traffic and guest engagement, with the company maintaining disciplined pricing (average check increase below industry for the fourth consecutive quarter).
- Menu innovation, including the towering double cheeseburger sliders and expanded bone-in chicken wing options with Garage Beer, is gaining traction and supporting traffic growth.
- Total revenues decreased by $6.1 million year-over-year to $278 million, primarily due to restaurant closures.
- Adjusted EBITDA declined by $3.5 million to $18.9 million, driven by a $4 million increase in marketing spend.
- Average check increase was only 1.5%, with a 1.8% negative impact from mix and discounts due to Big Yum! value offerings, pressuring profitability.
- The company faces a tougher comparison in Q3 as it laps the launch of Big Yum! from the prior year, potentially impacting sales growth.
- Commodity costs remain inflationary, particularly for beef, though expected to moderate in the back half of the year.
Good afternoon. Welcome to the Red Robin Gourmet Burgers, Inc. Second Quarter 2026 Earnings Call. This conference call is being recorded. During management's presentation and in response to your questions, they will be making forward-looking statements about the company's business outlook and expectations. These forward-looking statements and all other statements that are not historical facts reflect management's beliefs and predictions as of today and therefore are subject to risks and uncertainties as described in the company's SEC filings.
Management will also discuss non-GAAP financial measures as part of today's conference call. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles, but are intended to illustrate alternative measures of the company's operating performance that may be useful.
Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in the earnings release. The company has posted its second quarter 2026 earnings release on its website at ir.redrobin.com. On today's call
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