Red Robin Gourmet Burgers, Inc. (RRGB, Financial) has announced a significant leadership change with G.J. Hart stepping down from his role as President and CEO. After five-and-a-half years at the helm, Hart is departing the company following his successful efforts in enhancing the guest experience and steering Red Robin towards an operations-centric approach. He will continue to contribute to the industry through board memberships and mentoring emerging leaders.
David Pace, who has been serving as the Chairman of the Board, will take over as the new President and CEO effective immediately. With extensive experience in the industry, Pace is expected to lead Red Robin into its next phase of transformation. To ensure a seamless transition, Hart will remain in an advisory role until September of this year.
In tandem with these changes, Anthony Ackil, currently a Director on the Board, will step up as Chairman, also effective immediately. Despite his new responsibilities, Pace will continue to be a part of the Board.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Red Robin Gourmet Burgers Inc (RRGB, Financial) is $9.25 with a high estimate of $12.00 and a low estimate of $3.25. The average target implies an upside of 245.15% from the current price of $2.68. More detailed estimate data can be found on the Red Robin Gourmet Burgers Inc (RRGB) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Red Robin Gourmet Burgers Inc's (RRGB, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Red Robin Gourmet Burgers Inc (RRGB, Financial) in one year is $8.00, suggesting a upside of 198.51% from the current price of $2.68. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Red Robin Gourmet Burgers Inc (RRGB) Summary page.
RRGB Key Business Developments
Release Date: February 26, 2025
- Total Revenue: $285.2 million in Q4 2024, down from $309 million in Q4 2023 due to one less operating week.
- Comparable Restaurant Revenue: Increased by 3.4% in Q4 2024, excluding deferred loyalty revenue impact.
- Adjusted EBITDA: $12.7 million in Q4 2024, an increase of $2 million from Q4 2023.
- Restaurant Level Operating Profit: 11.5% of restaurant revenue, a decrease of 70 basis points from Q4 2023.
- General and Administrative Costs: $18.4 million in Q4 2024, down from $22.7 million in Q4 2023.
- Selling Expenses: $5.7 million in Q4 2024, down from $6.4 million in Q4 2023.
- Cash and Cash Equivalents: $30.7 million at the end of Q4 2024.
- Outstanding Principal Balance: $189.5 million under the credit agreement at quarter end.
- 2025 Revenue Guidance: Between $1.225 billion and $1.25 billion.
- 2025 Restaurant Level Operating Profit Guidance: 12% to 13%, an increase of 120 to 220 basis points from 2024.
- 2025 Adjusted EBITDA Guidance: $60 million to $65 million, excluding non-cash stock-based compensation.
- 2025 Capital Expenditures Guidance: $25 million to $30 million.
- Store Closures: Expect to close 10 to 15 restaurants in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Red Robin Gourmet Burgers Inc (RRGB, Financial) reported a 600 basis point improvement in traffic from the first quarter to the fourth quarter of 2024.
- The revamped Red Robin royalty program led to a membership growth of approximately 1.5 million members, ending the year with 14.9 million members.
- Dining guest satisfaction scores increased by approximately 8% points compared to 2023, surpassing the casual dining average.
- The company delivered a 3.4% increase in comparable restaurant revenue in the fourth quarter, excluding the impact of a change in deferred loyalty revenue.
- Adjusted EBITDA increased by 19% to $12.7 million during the fourth quarter, showcasing effective management of the middle of the P&L.
Negative Points
- Total revenues for the fourth quarter were $285.2 million, down from $309 million in the same period last year, primarily due to fewer operating weeks.
- Restaurant level operating profit as a percentage of restaurant revenue decreased by 70 basis points compared to the fourth quarter of 2023.
- Approximately 70 restaurants generated a restaurant level operating loss of $6 million in 2024, impacting overall profitability.
- The company plans to close 10 to 15 underperforming restaurants in 2025, which could lead to short-term disruptions.
- The decline in guest traffic was noted, although partially offset by an increase in guest check average.
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