Red Robin Stock Down 33% in 6 Months: Time to Buy the Dip?

Red Robin Gourmet Burgers, Inc. RRGB shares have declined 37.2% in the past six months compared with the Zacks Retail - Restaurants industry’s 11.9% fall. The decline can be primarily attributed to a tough consumer environment, persistent beef inflation and increasing competition in the fast food dining space.

However, the company continues to demonstrate solid progress as its “First Choice” plan gains momentum, supported by improving traffic trends, strong operational execution and ongoing menu innovation. RRGB’s enhanced marketing strategy, compelling value offerings and disciplined cost-efficiency initiatives remain central to driving long-term, sustainable growth. The launch of the Big Yummm Burger deal has significantly strengthened guest engagement, driving an approximately 250-basis-point sequential traffic improvement.

Red Robin currently has a Zacks Rank #2 (Buy). It also has a favorable VGM Score of A, making it a potentially interesting investment opportunity. The Zacks Consensus Estimate for 2025 loss per share has been narrowed to 60 cents per share from a loss of 66 cents over the past 60 days.
 
Let’s take a closer look at the key factors supporting the stock’s performance.

Factors Likely to Aid RRGB Stock

Strategic Initiatives to Boost Growth: Red Robin is advancing a focused set of initiatives to drive sustainable growth and strengthen its competitive position. Under its “First Choice” plan, the company is improving operational efficiency, elevating guest value and enhancing restaurant performance. In the third quarter, sequential traffic gains were supported by strong four-wall execution, including a 90-basis-point year-over-year improvement in restaurant-level operating profit driven largely by labor productivity. The “Find Money” initiative continues to deliver meaningful cost efficiencies, with expected G&A savings of $3-$4 million in 2025 and a $10 million run-rate benefit in 2026. The company is also investing in targeted restaurant refreshes, completing updates across 20 locations during the quarter. These light-touch projects —  averaging roughly $40,000 per restaurant — focus on high-impact upgrades such as flooring, interior finishes, lighting and exterior improvements to enhance the overall guest experience.

Digital Initiatives to Drive Customer Engagement: Digital engagement remains a meaningful growth catalyst for Red Robin, deepening customer relationships and supporting higher visit frequency. In 2025, the company is prioritizing app-based engagement, enhanced technology and stronger digital infrastructure to fuel expansion in its off-premise business.

Red Robin recently introduced a data-driven marketing initiative that leverages advanced microtargeting capabilities to engage guests more personally and efficiently than traditional broad-based messaging. Using internally developed algorithms, the program analyzes guest decision-making behaviors, identifies the factors that motivate visits in each trade area, and delivers tailored messaging and promotions that resonate more directly with individual customers.

Focus on Menu Innovation: Red Robin is placing renewed emphasis on menu innovation as a core pillar of its traffic-driving strategy. The launch of the Big Yummm burger deal at the start of the third quarter was highly accretive for the company as it performed better than expected, resulting in a 250-basis point sequential traffic improvement from the second quarter to the third quarter. Building on the success of the Big Yummm Burger deal, RRGB is actively developing new offerings and value-focused price points to further strengthen its competitive positioning. These upcoming menu enhancements are expected to broaden relevance, drive trial and support sustained traffic growth as the company moves into 2026.

Other Key Picks

Other top-ranked stocks from the Zacks Retail-Wholesale sector are as follows:

El Pollo Loco Holdings, Inc. LOCO presently sports a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 19.6%, on average. LOCO stock has fallen 2.8% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for LOCO’s 2026 sales and EPS indicates growth of 1.3% and 4.2%, respectively, from the year-ago period’s levels.

Dillard's Inc. DDS sports a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 26.5%, on average. DDS stock has rallied 59.9% year to date.

The Zacks Consensus Estimate for Dillard’s 2026 sales indicates growth of 0.7%, while EPS implies a decline of 8.2% from a year ago.

Expedia Group, Inc. EXPE flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 4.5%, on average. EXPE stock has gained 40.5% year to date.

The Zacks Consensus Estimate for EXPE’s 2026 sales and EPS indicates growth of 6.3% and 20.9%, respectively, from the prior-year levels.

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

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