Red Robin Gourmet Burgers Inc. said Wednesday the company’s chief financial officer and chief marketing officer have resigned, in a move that securities analysts see as part of ongoing turnaround efforts at the casual-dining brand.
Both Katie Scherping, chief financial officer and senior vice president, and Susan Lintonsmith, chief marketing officer and senior vice president, are leaving the company July 15, the company said.
Scherping has been with Red Robin as CFO since June 2005, and Lintonsmith joined the company as CMO in April 2007. A search for their successors has begun, Red Robin said in a statement.
Stephen Carley, Red Robin’s chief executive, wished both Scherping and Lintonsmith well in a statement, noting that the departure of the two executives was not related to any disagreement with the company’s board of directors, audit committee or the company’s auditors.
“The entire Red Robin team remains focused on implementing the initiatives of our strategic plan – Project RED – and working with a sense of urgency to drive performance improvement and build a foundation for long-term growth and profitability,” Carley said.
“While we are still in the early stages of this effort, we remain on track for achieving the objectives we identified to strengthen our business performance and our management team, and setting a course to become a best-in-class restaurant company,” he added.
Project RED initiatives have included the launch of a new loyalty program, an emphasis on boosting bar business and the use of limited-time offer promotions supported by television advertising.
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Brad Ludington, an analyst with KeyBanc Capital Markets Inc., said in a report Wednesday that the departures are “in line with turnaround efforts” undertaken by Carley, who joined the company in September 2010.
“We do not expect a negative impact from the changes and believe a new CFO and CMO will be announced shortly,” Ludington said.
Red Robin has been under pressure from activist investor groups to go private and make other changes that would ease turnaround efforts.
In April, one of those activists, David Makula of Oak Street Capital Management LLC, was named to the chain’s board and the board’s audit committee, with the agreement not to block strategic efforts going forward.
In its first quarter ended April 17, Red Robin reported a 76-percent increase in profit – an indication, Carley said at the time, that turnaround efforts were taking hold.
Same-store sales increased 1.9 percent for corporate restaurants, primarily on a 1-percent increase in average check.
The casual-dining chain also overhauled its menu in April and raised menu prices by about 1.5 percent, the first increase in about three years.
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