What is in this article?:
- Red Robin stock price rises as 4Q profit doubles
- Combating economic headwinds
Company plans menu, unit upgrades to keep momentum in 2013
The stock price for Red Robin Gourmet Burgers Inc. rose significantly on Tuesday after the company reported a more than doubling of fourth-quarter profit over the prior year.
During a call to analysts following the fourth-quarter and full-year financial reports, the company also reiterated traffic-driving plans for 2013 — including the previously announced test of new premium burgers — while warning of continued volatility in consumer discretionary spending.
For the quarter ended Dec. 30, Red Robin reported net income of $6.5 million, or 45 cents per share, compared with $2.9 million, or 20 cents per share, a year ago. Excluding charges related to the company’s debt refinancing in December 2012, the company said net income was $8.4 million for the quarter.
Revenue for company-operated restaurants climbed 16 percent for the quarter to $240.7 million, compared with $206 million a year ago. Systemwide, revenue increased 15 percent to total $327.5 million, compared with $285.1 million a year ago.
Same-store sales for the quarter grew 1.4 percent for company-owned restaurants, including a 0.3-percent increase in traffic and a 1.1-percent increase in average check that reflected guests buying more drinks and appetizers, as well as a “modest” menu price increase during the quarter that offset higher commodity costs for beef and potatoes, the company said.
The news sent stock prices up nearly 20 percent on Tuesday to $43.33 late in the day as analysts predicted the burger chain would continue to steal market share.
Stephen Anderson, senior restaurant analyst for Miller Tabak + Co. LLC, wrote in a report Tuesday that Red Robin’s “third consecutive quarterly traffic increase gives us more confidence in the company’s ability to compete against larger rivals.”
Steve Carley, Red Robin’s chief executive, described 2012 as a “foundational” year, during which the Greenwood Village, Colo.-based casual-dining chain outpaced the industry in guest-count growth and margin expansion.
“Looking ahead to 2013, our goal is to build on what we have already accomplished to continue elevating the guest experience and extending our burger authority, while we capitalize on our significant growth potential for new unit development,” Carley said.