Red Robin Misses Expectations as Sales Decline

Red Robin Gourmet Burgers Inc. said Tuesday that sales slid amid fewer visitors to its namesake casual-dining restaurants, as the company cut its revenue outlook for the year.

Shares of the casual-dining chain, which have fallen 26% over the past 12 months, fell 13% to $53.91 in morning trading in New York.

For the current year, Red Robin now expects revenue to grow by 8%. In March, the company said it expected the top line to grow between 8.5% and 9.5%.

Sales at the company's established restaurants declined 2.6% in the first quarter, hurt by a 4.1% decrease in patron counts that was partially offset by a 1.5% increase in the average guest check. Analysts were expecting same-restaurant sales to edge down 0.2%, according to Consensus Metrix.

Chief Executive Steve Carley said he was disappointed with the results, though he noted they were an improvement over Red Robin's performance in the fourth quarter of 2015. Mr. Carley said operational and marketing initiatives could boost results.

Competition among burger chains has been intensifying recently with the entry of fast-casual chains such as Shake Shack Inc. and others. More traditional burger chains have tried to upgrade their offerings amid the growing popularity of the newer chains.

Red Robin has been renovating and rebranding many of its stores, remodeling more than 150 restaurants in 2015, with plans to renovate 70 in the current year. The company said it closed the latest quarter with 443 company-owned Red Robin restaurants.

Over all, for the quarter ended April 17, Red Robin reported a profit of $14.2 million, or $1.03 a share, down from $16.6 million, or $1.16 a share, a year before. Excluding items such as litigation contingencies and asset impairment, profit was $1.27 a share compared with $1.10 a year ago.

Revenue increased 1.8% to $402.1 million.

Analysts polled by Thomson Reuters had expected adjusted per-share profit of $1.11 and revenue of $415.2 million.

Restaurant-level operating margin fell to 22.5% compared with 23.0%

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

May 17, 2016 13:15 ET (17:15 GMT)

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