Why Is Red Robin (RRGB) Up 11.8% Since Last Earnings Report?

A month has gone by since the last earnings report for Red Robin (RRGB). Shares have added about 11.8% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Red Robin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Red Robin Gourmet Burgers Q2 Earnings Top, Revenues Miss Estimates

Red Robin Gourmet Burgers reported fiscal second-quarter 2025 revenues of $283.7 million, down 5.5% year over year from $300.2 million. The figure, however, came in slightly below the Zacks Consensus Estimate of $285 million. Comparable restaurant revenue declined 3.2% (down 1.3% excluding deferred loyalty revenue), as traffic fell 5.5%.

On the bottom line, the company posted adjusted earnings of 26 cents per share, comfortably beating the Zacks Consensus Estimate of a loss of 25 cents. This compared favorably with a loss of 38 cents per share in the year-ago quarter. Net income was $4 million versus a loss of $9.5 million last year.

Margins and Profitability

Red Robin Gourmet Burgers reported restaurant-level operating profit of $40.5 million, up from $34.7 million in the prior year. Restaurant-level operating margin expanded 270 basis points year over year to 14.5%, driven primarily by labor efficiency improvements. Adjusted EBITDA rose 64% year over year to $22.4 million, with adjusted operating income at $9.8 million, or 3.5% of revenues, versus a loss of $4.6 million last year.

Balance Sheet and Liquidity

The company ended the quarter with cash and cash equivalents of $24.4 million and total liquidity of $61.9 million, including availability under its credit facility. Long-term debt stood at $163.1 million, down from $181.6 million at the end of fiscal 2024, reflecting debt repayment of $20.3 million in the year-to-date period. No share repurchases were announced.

Outlook

For fiscal 2025, Red Robin Gourmet Burgers now expects revenues of about $1.2 billion, down slightly from its prior view of $1.21-$1.23 billion. Management reaffirmed restaurant-level operating margin guidance of 12-13% and adjusted EBITDA in the range of $60-$65 million. Comparable restaurant sales are projected to decline 3-4% for the remainder of the year.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in fresh estimates.

VGM Scores

At this time, Red Robin has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a score of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Red Robin has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Red Robin belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Yum China Holdings (YUMC), has gained 0.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.

Yum China reported revenues of $2.79 billion in the last reported quarter, representing a year-over-year change of +4%. EPS of $0.58 for the same period compares with $0.55 a year ago.

For the current quarter, Yum China is expected to post earnings of $0.77 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Yum China. Also, the stock has a VGM Score of B.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research