Red Robin Stock Soars 11% on Earnings Beat

On August 14, 2025, Red Robin Gourmet Burgers' stock surged by 11% in pre-market trading, driven by a strong second-quarter earnings report that exceeded analysts' expectations.

Red Robin reported earnings of $0.26 per share for the second quarter, surpassing the Zacks Consensus Estimate of a loss of $0.25 per share. This positive earnings surprise was accompanied by a 3.3% after-hours stock surge, reflecting investor optimism about the company's financial performance.

The company's restaurant-level operating profit margin improved by 270 basis points to 14.5%, primarily due to a 300 basis point labor efficiency gain. This operational efficiency was achieved through refined scheduling and forecasting practices, which helped offset rising commodity costs.

Despite the positive earnings, Red Robin faced a 5.5% decline in guest traffic year over year. This decrease was attributed to aggressive promotional activities by competitors and a strategic pause in marketing during the quarter. The company's "Big Yum" promotion, a $9.99 burger deal with bottomless sides, aimed to boost traffic but came with a potential 2%-3% drag on per-person average and 1% margin compression in the second half of 2025.

Red Robin's revised full-year 2025 guidance reflects a realistic assessment of its challenges, with revenue expectations lowered to $1.2 billion. The company remains committed to maintaining a 12%-13% restaurant-level operating profit margin through continued labor efficiency gains and cost discipline. The "First Choice" plan, which includes strategic marketing overhauls, technology upgrades, and facility refreshes, represents a long-term play to reposition the brand.