GREENWOOD VILLAGE Colo. Red Robin Gourmet Burgers Inc. said Thursday it would increase advertising and add new menu items to spark sales after its profit was nearly halved in the first quarter.
As a 425-unit casual-dining chain, Red Robin is in an industry segment that has been particularly hard hit during the recession as consumers trade down to less expensive fast causal and quick service operators. The company said the weak trends are likely to continue through the year.
Net income for the quarter ended April 19 totaled $3.8 million, or 25 cents per share, compared with year-ago first-quarter earnings of $7.2 million, or 43 cents per share.
Latest-quarter revenue rose 6 percent to $270.8 million. Same-store sales at corporate units fell 8.1 percent, reflecting a 2.1-percent increase in the average check and a 10.2 percent decline in customer traffic.
Red Robin executives told investors in a conference call Thursday that the company plans to return to national cable television advertising and direct mail pieces. It also plans to re-introduce the chain’s popular steak sliders this summer to help drive customer traffic.
“While the macroeconomic environment remains challenging, our restaurant teams are focused on driving traffic and strengthening our business by offering our guests the service, quality and value they expect from Red Robin, while we invest in our people, streamline our operations and manager our controllable costs,” said Dennis Mullen, chairman and chief executive.
Contact Dina Berta at [email protected].
