Red Robin Gourmet Burgers Inc. blamed disappointing second-quarter results on a challenging economy, discounting by competitors and marketing missteps, the company said Thursday.

The Greenwood Village, Colo.-based casual-dining operator said same-store sales rose 1.2 percent during the quarter ended July 13, but the increase resulted from a 3.7-percent increase in average check, which offset a 2.5-percent decline in guest counts.

Red Robin chief executive Steve Carley said economic headwinds remain a factor, but advertising during the quarter wasn’t as effective as expected. A promotion for the chain’s more premium burger platform ended too early, and a tie-in with the movie “Hercules” performed poorly in light of weak box office results.

However, the company has made adjustments, and officials said it will return to its focus on everyday value and new product news.

Meanwhile, Red Robin is accelerating its remodeling program, with 65 more restaurants expected to be remodeled before the end of the year. Company officials had previously projected that 50 units would be redone. Remodeled restaurants are showing a sales lift of about 6 percent, the company said.

Next week, Red Robin plans to reveal a realignment of its operations leadership team, including a new senior vice president of operations.

Red Robin ended the quarter with 502 restaurants, including 365 company-owned locations and 130 franchised units, as well as seven of fast-casual Red Robin Burger Works restaurants.
 

2Q NET INCOME

Result: $9.5 million, or 65 cents per share
% Decrease: 14% (from $11.1 million, or 77 cents per share)

2Q REVENUE

Result: $256.1 million
% Increase: 7% (from $238.3 million)

2Q SAME-STORE SALES

% Increase systemwide: 1.2%

Source: Company report



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Contact Lisa Jennings at lisa.jennings@penton.com.
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