Sales Momentum Continues to Build 158
Company-operated Dining Rooms have Re-opened as of May 24, 2020
Reports Preliminary Sales Results for the Fiscal First Quarter 2020
Ended April 19, 2020
Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) (“Red Robin” or
the “Company”) today provided a business and operational update and
reported preliminary sales results for the fiscal first quarter
ended April 19, 2020.
Relevant Highlights Year-To-Date Include
- Through the first eight weeks of fiscal 2020, comparable
restaurant revenue grew 3.7%, driven in part by positive Guest
counts.
- Since the mid-March peak impact of the COVID-19 pandemic,
substantial improvement in revenue with consistent and sequential
increases in each of the last five weeks; preliminary comparable
restaurant revenue was -47.0% for the week ended May 24, 2020.
- Re-opening dining rooms with a measured and strategic approach
and a focus on health and safety; preliminary comparable restaurant
revenue for restaurants with re-opened dining rooms was -31.9% for
the week of May 24, 2020.
- Maintaining significantly higher off-premise sales, which have
tripled when compared to pre-COVID-19 levels.
- With improving revenue and previously taken cost reductions,
reduced estimated average cash burn to $2 million per week for the
second fiscal quarter.
- As of May 29, 2020, the Company has approximately $80 million
of total liquidity.
- Finalized an amendment to its credit facility, which provides
further financial flexibility during the COVID-19 pandemic.
Paul J.B. Murphy III, Red Robin’s President and Chief Executive
Officer, said, “We are very encouraged by our five sequential weeks
of sales improvement through May 24th due to the continued strong
growth in off-premise sales and early traction in dine-in sales. We
attribute these trends to our enhanced execution, developed around
our strategic plan and implemented on an accelerated basis as
restaurants re-open, which has resulted in record dine-in and
off-premise Guest satisfaction scores. Across our 158 re-opened
dining rooms, sales have been positively impacted by the
accelerated implementation of our new hospitality model, coupled
with strong health and safety standards. Notably, restaurants with
re-opened dining rooms are still capturing meaningful off-premise
sales, demonstrating the enduring and growing popularity of Red
Robin for off-premise occasions.”
Mr. Murphy added, “The health and safety of our Guests and Team
Members is paramount. In addition, our Team Members have done an
outstanding job protecting the health and safety of our Guests
while also delivering on the Red Robin brand promise. We sincerely
thank them for their dedication and commitment to our communities
during these difficult times and know how eager they are to welcome
our Guests back into our restaurants for elevated dine-in
experiences as more dining rooms re-open.”
Business and Operational Update
Red Robin entered fiscal 2020 with strong business momentum and
substantially improved guest satisfaction scores. Through the first
eight weeks of the year, comparable restaurant revenue grew 3.7%,
driven in part by positive Guest counts. These results were built
on execution of the core tenets of the Company’s strategic
plan.
With the onset of the COVID-19 pandemic, Red Robin pivoted to an
off-premise only business model and leveraged the opportunity to
focus on enhancing the Guest experience while ensuring
uncompromising adherence to health and safety protocols. Of note,
off-premise sales have tripled compared to pre-COVID 19 levels.
The Company immediately accelerated its menu simplification plan
by reducing approximately one third of its menu items to support
the off-premise only business model. The simplified menu and ease
of ordering from a new enhanced website focused on the online
ordering user experience have improved speed of service and
accuracy. Increased car-side and home delivery options, including
Red Robin Delivery where Guests order directly from Red Robin with
outsourced delivery, have improved convenience to our Guests and
the economics of our off-premise business.
The Company spent considerable time developing a measured and
strategic approach to re-open dining rooms with a focus on the
health and safety of our Guests and Team Members. Consumer research
also led to several enhanced measures including all Team Members
wearing face coverings and completing daily health surveys,
including temperature checks, and social distancing protocols. Red
Robin has made visible cleaning and disinfecting behaviors
important elements of its daily operations, including dedicating
one Team Member on each shift to front of house sanitation. In
addition, all re-opened dining rooms feature the Company’s new
hospitality model, Total Guest Experience (“TGX”), that Red Robin
had previously planned to implement over the course of fiscal
2020.
Sales have continued to grow as the Company began to re-open
select dining rooms at a limited capacity beginning April 28, 2020.
As of May 24, 2020, Red Robin had re-opened 158 dining rooms with
limited capacity representing 38% of currently open
Company-operated restaurants. Preliminary comparable restaurant
revenue for restaurants with dining rooms re-opened for the full
week of May 24, 2020 was -31.9%. Overall, the Company’s weekly
comparable restaurant revenue has sequentially improved and, for
the week ended May 24, 2020, preliminary comparable restaurant
revenue was -47.0%.
Preliminary Comparable Restaurant Revenue and Related Data
through the Week Ended May 24, 2020
Week ended
Company-operated
Restaurants
26-Apr
3-May
10-May
17-May
24-May
Weekly Net Comparable Restaurant
Revenue
-56.0%
-54.7%
-52.2%
-47.9%
-47.0%
Average Net Sales per Restaurant
$23,908
$23,994
$26,747
$28,292
$30,751
# of Comparable Company-operated
Restaurants
414
414
414
414
414
Financial and Liquidity Update
As previously announced, Red Robin
has taken several actions to enhance liquidity, reduce costs, and
strengthen its organizational structure. As a result of these
actions, the Company has reduced its estimated cash burn and
currently expects its average cash-burn rate during the fiscal
second quarter to be approximately $2 million per week, which
includes partial rent payments, re-opening costs, one-time COVID-19
expenses and costs associated with finalizing the amendment to its
credit facility.
Red Robin had a cash balance of
$88.9 million as of the fiscal first quarter end on April 19, 2020
and has liquidity of approximately $80 million as of May 29, 2020,
including cash and borrowing capacity under its credit
facility.
Immediately following today’s press release, Red Robin expects
to file with the SEC a Current Report on Form 8-K related to the
amendment to its credit facility with its lenders.
Preliminary First Quarter 2020 (16 Weeks) Sales Summary
Compared to First Quarter 2019 (16 Weeks)
- Total revenues were $306.1 million, a decrease of 25.3%;
- Comparable restaurant revenue decreased 20.8%;
- Comparable restaurant revenue increased 3.7% through the first
eight weeks;
- Comparable restaurant revenue decreased 43.2% through the last
eight weeks;
- Comparable restaurant Guest counts decreased 20.9%; and
- Off-premise sales increased 86.1% and comprised 26.3% of total
food and beverage sales.
About Red Robin
Red Robin Gourmet Burgers, Inc. (www.redrobin.com), a casual
dining restaurant chain founded in 1969 that operates through its
wholly-owned subsidiary, Red Robin International, Inc., and under
the trade name, Red Robin Gourmet Burgers and Brews, is the Gourmet
Burger Authority™, famous for serving more than two dozen
craveable, high-quality burgers with Bottomless Steak Fries® in a
fun environment welcoming to Guests of all ages. At Red Robin,
burgers are more than just something Guests eat; they’re a bonding
experience that brings together friends and families, kids and
adults. In addition to its many burger offerings, Red Robin serves
a wide variety of salads, soups, appetizers, entrees, desserts, and
signature beverages. Red Robin offers a variety of options behind
the bar, including its extensive selection of local and regional
beers, and cocktails. It’s now easy to take Red Robin anywhere with
online ordering for to-go and Gourmet Burger Bar catering pickups
through Yummm2Go. There are more than 550 Red Robin restaurants
across the United States and Canada, including those operating
under franchise agreements. Red Robin… YUMMM®! Connect with Red
Robin on Facebook, Instagram and Twitter.
Forward-Looking Statements
Forward-looking statements in this press release are made under
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements include, without limitation,
statements regarding preliminary financial results including
revenues, guest counts, and off-premise sales, and related trends,
the expected cash burn for the second quarter, the impact of
COVID-19 on the Company’s business, the ability of the Company’s
restaurants to operate on and grow a substantially all off-premise
model, additional measures to further preserve financial
flexibility, adherence to the guidance of the CDC and local health
departments, strengthening of the Company’s liquidity position and
the Company’s ability to overcome near-term operating conditions
and be better positioned for the long term. These statements are
based on assumptions believed by the Company to be reasonable and
speak only as of the date on which such statements are made. Except
as required by law, the Company undertakes no obligation to update
such statements to reflect events or circumstances arising after
such date, and cautions investors not to place undue reliance on
any such forward-looking statements. Forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those described in the statements based on a
number of factors, including but not limited to the following: the
rapidly evolving nature of the COVID-19 pandemic and related
containment measures, including the potential for a complete
shutdown of Company restaurants; economic, public health, and
political conditions that impact consumer confidence and spending,
including the impact of COVID-19 and other health epidemics or
pandemics on the global economy; changes in unemployment rates;
changes in laws impacting the Company’s business, including
increases in minimum wages and benefit costs; the ability to
achieve significant cost savings; the Company’s ability to defer
lease or contract payments or otherwise obtain concessions from
landlords, vendors, and other parties in light of the impact of the
COVID-19 pandemic; the economic health of the Company’s landlords
and other tenants in retail centers in which its restaurants are
located; the economic health of suppliers, licensees, vendors, and
other third parties providing goods or services to the Company; the
Company’s ability to continue to increase sales; the effectiveness
of the Company’s marketing strategies and promotions and menu
changes; the cost and availability of key food products,
distribution, labor, and energy; the effectiveness of the Company’s
long term strategic initiatives; the cost and availability of
capital or credit facility borrowings; the ability to obtain equity
financing; the adequacy of cash flows or available debt resources
to fund operations; the impact of federal, state, and local
regulation of the Company’s business; and other risk factors
described from time to time in the Company’s Form 10-K, Form 10-Q,
and Form 8-K reports (including all amendments to those reports)
filed with the U.S. Securities and Exchange Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20200529005576/en/
ICR Raphael Gross, Managing Director (203) 682-8253
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