Red Robin Gourmet Burgers 2025 Q1 Earnings Beats Expectations with Net Income Swinging 113.2%

Red Robin Gourmet Burgers (RRGB) reported its fiscal 2025 Q1 earnings on May 29th, 2025. The company surpassed analysts' expectations, demonstrating a notable turnaround with a positive net income. Adjusted guidance reflects challenges ahead, as Red Robin projects total revenue between $1.21 billion to $1.23 billion for 2025, slightly lower than previous estimates due to macroeconomic conditions. The company maintains forecasted EBITDA in the range of $60 million to $65 million, aligning with operational targets.

Revenue
Red Robin Gourmet Burgers reported a 1.7% increase in total revenue, reaching $390.30 million in Q1 2025, compared to $383.91 million in Q1 2024. The restaurant segment was the primary contributor with $385.81 million, while franchise royalties, fees, and other revenues added $6.54 million. Franchise revenue accounted for $4.49 million, gift card breakage contributed $1.71 million, and other revenue totaled $348,000, culminating in total revenues of $392.35 million.

Earnings/Net Income
Red Robin Gourmet Burgers achieved a significant turnaround with an EPS of $0.07 in Q1 2025, rebounding from a loss of $0.61 per share in Q1 2024. The company also reported a net income of $1.25 million, marking a 113.2% positive swing from the net loss of $9.46 million in the previous year. This positive EPS indicates improved financial performance.

Price Action
The stock price of Red Robin Gourmet Burgers experienced a 7.67% decline during the latest trading day but showed resilience by increasing 8.30% over the most recent full trading week and 11.39% month-to-date.

Post Earnings Price Action Review
The strategy of purchasing Red Robin Gourmet Burgers (RRGB) shares after revenue announcements and holding for 30 days has resulted in substantial losses, with a backtested return of -78.83% over the past three years. The negative Sharpe ratio of -0.60 indicates poor risk-adjusted returns, while the maximum drawdown of -86.41% highlights significant financial setbacks. The strategy also exhibited high volatility at 67.93%, pointing to considerable risk and potential losses. This suggests that such a strategy is not advisable due to the inherent risk and historical losses associated with it.

CEO Commentary
Dave Pace, President and CEO, expressed optimism about Red Robin's ongoing transformation, emphasizing improvements in operational execution, food quality, and guest satisfaction. He highlighted the focus on sustainable traffic growth, debt reduction, and reinvestment in restaurant facilities, aiming to enhance value for guests and shareholders.

Guidance
Red Robin projects total revenue between $1.21 billion to $1.23 billion for 2025, adjusting prior guidance due to macroeconomic conditions. Comparable restaurant sales are expected to remain around 0%, with restaurant-level operating profit maintained at 12% to 13% and adjusted EBITDA in the range of $60 million to $65 million. Capital expenditures are anticipated to be approximately $30 million, with guest traffic expected to decline due to current tariff policies without further menu price increases.

Additional News
Red Robin Gourmet Burgers recently announced a leadership transition, with G.J. Hart stepping down as President and CEO, and Dave Pace appointed as his successor. The company celebrated National Burger Month with a Bottomless Burger Pass promotion, offering exclusive deals and a chance to win burgers for a year. Additionally, Red Robin launched a collaboration with Mike's Hot Honey®, introducing new spicy menu items available for a limited time, reflecting the company's innovative marketing strategies and product offerings.