Red Robin Gourmet Burgers Inc. Thursday reported a net loss in the third quarter from a combination of impairment charges, executive compensation and higher advertising expenses, among others factors.
The company also said that same-store sales trends had taken a positive turn in the period.
Red Robin reported a net loss of $4.2 million, or 27 cents per share, for the third quarter ended Oct. 3, compared with a profit of $5.7 million, or 37 cents per share, in the same year-ago period.
The Greenwood Village-based operator and franchisor of casual-dining restaurants said its quarterly loss included the effects of a $6.1-million non-cash restaurant impairment charge and $2.3-million in pre-tax executive transition expenses.
Excluding those charges, the company would have had net income of $1.8 million, or 11 cents a share, or about a third of the profit of the 2009 third quarter.
In September Red Robin replaced chief executive Dennis Mullen with Steve Carley, formerly chief executive of El Pollo Loco Inc.
Third-quarter revenue rose 4.2 percent on a year-over-year basis, to $194.8 million. Quarterly franchise royalties and fees decreased 1.1 percent, to $3 million, it added.
For the third quarter, comparable-store sales rose 0.9 percent at company restaurants, compared with a 14.9-percent decrease a year earlier, as a 2.6-percent increase in guest counts was partially offset by a 1.7-percent dip in average check, officials said.
They said comparable-store sales increased by 3.5 percent at franchised restaurants in the United States, compared with a 14.4-percent decrease a year earlier, but declined by 0.6 percent at franchised Canadian restaurants, which had seen comps shrink by 0.2 percent a year earlier.
Executives said comparable-store sales at company units for the first four weeks of the ongoing fourth quarter rose 4.3 percent, compared with a decrease of 11.6 percent during the same period in 2009. They noted that the first four weeks of 2010’s fourth quarter included two weeks of national cable TV and some local network TV advertising, compared with two weeks of TV advertising limited to 10 local markets during the first four weeks of 2009’s fourth quarter.
As of the end of the third quarter, there were 312 company-owned and 134 franchised Red Robin restaurants, the company said. That was up from 304 company and 132 franchised locations a year earlier.
Contact Alan J. Liddle at [email protected].
