GREENWOOD VILLAGE Colo. Red Robin Gourmet Burgers Inc. cut its annual earnings outlook and reduced its sales expectations on Thursday despite a second quarter of improved profit and a 15.6-percent jump in revenues.
The operator or franchisor of more than 400 namesake restaurants said it remained “concerned about the macroeconomic factors impacting the casual-dining industry.”
“While we believe our branding efforts and restaurant initiatives are making a positive impact on our performance, they are being overshadowed by industry headwinds,” said Dennis Mullen, Red Robin chairman and chief executive.
The company said it now expects full-year, per-share earnings to total between $1.87 and $2.02, down significantly from projections made in May for earnings between $2.04 per share and $2.23 per share. In fiscal 2007, Red Robin earned $1.98 per share.
The change reflects full-year revenue expectations of between $888 million and $894 million, down from a previous guidance that called for revenues as high as $918 million. Fiscal 2008 same-store sales are expected to increase between 1 percent and 2 percent, down from previous expectations for a gain as high as 4 percent, the company reported.
For the second quarter ended July 13, Red Robin earned $7.9 million, or 49 cents per share, compared with earnings of $4.9 million, or 29 cents per share, in the year-ago quarter. The year-earlier results were weighed down by costs of $1.6 million related to acquisitions of formerly franchised restaurants and a $1.7 million legal settlement.
Latest-quarter revenues totaled $206.4 million, up from $178.6 million a year ago. Same-store sales at corporate restaurants fell 0.4 percent. The dip reflected a 4-percent menu price increase and a 4.4-percent drop in guest traffic, Red Robin said.