A month has gone by since the last earnings report for Red Robin (RRGB). Shares have added about 38.7% in that time frame, outperforming the S&P 500.
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 latest earnings report in order to get a better handle on the important catalysts.
RRGB Q1 Earnings Miss Estimates on Higher Costs and Charges
Red Robin reported the fiscal first quarter of 2026 results, with earnings missing the Zacks Consensus Estimate, but total revenues came in line with the same. Both metrics declined on a year-over-year basis.
The company posted adjusted earnings of 13 cents per share in the first quarter of fiscal 2026, down 31.6% from 19 cents a year ago. The quarter missed the Zacks Consensus Estimate of 21 cents by 38.1%.
Total revenues were $378.3 million, down 3.6% year over year, but in line with the Zacks Consensus Estimate of $378 million. Comparable restaurant revenues decreased 0.6%, reflecting a 1.6% decline in guest traffic that offset a 1% increase in average guest check.
Red Robin’s Q1 Margins Improve as Labor Efficiency Offsets Inflation
Red Robin reported restaurant-level operating profit of $54.8 million, compared with $55 million in the prior-year quarter. Restaurant-level operating margin was 14.8%, up 50 basis points year over year. Adjusted EBITDA edged down 2.1% year over year to $27.3 million. The company posted operating income of $5.5 million, or 1.5% of revenues, versus $9.1 million, or 2.3% of revenues, a year ago.
These margin gains were partly offset by inflation elsewhere in the P&L. Cost of sales rose 50 basis points to 23.3% of restaurant revenues, while other operating and occupancy costs each increased 20 basis points as a percentage of restaurant revenues.
Red Robin's Liquidity Improves While Debt Remains Elevated
The quarter ended with cash and cash equivalents of $24.3 million, up from $19.9 million at Dec. 28, 2025, and restricted cash of $9.6 million. Total liquidity was approximately $40.8 million, including available borrowing capacity under the credit facility.
Borrowings under the credit facility totaled $175.7 million, translating to long-term debt of $171.1 million versus $164.7 million at fiscal year-end after unamortized issuance costs. Operating cash flow was $7 million for the quarter, while capital expenditures were $6.7 million, keeping near-term flexibility tied to sustained restaurant-level execution.
RRGB Reaffirms 2026 Targets Despite Choppy Demand
For fiscal 2026, Red Robin reiterated its previously issued outlook. The company continues to expect comparable restaurant revenue growth of 0.5% to 1.5%, excluding deferred loyalty revenues, and a restaurant-level operating margin of approximately 13%.
Management also reaffirmed adjusted EBITDA guidance of $70 million to $73 million and capital expenditures of $25 million to $30 million. The company reiterated that its outlook does not include any impact from tactical refranchising initiatives discussed as part of its balance sheet strategy.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
Currently, Red Robin has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Red Robin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Red Robin is part of the Zacks Retail - Restaurants industry. Over the past month, Dutch Bros (BROS), a stock from the same industry, has gained 19.3%. The company reported its results for the quarter ended March 2026 more than a month ago.
Dutch Bros reported revenues of $464.41 million in the last reported quarter, representing a year-over-year change of +30.8%. EPS of $0.16 for the same period compares with $0.14 a year ago.
For the current quarter, Dutch Bros is expected to post earnings of $0.29 per share, indicating a change of +11.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.9% over the last 30 days.
Dutch Bros has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Red Robin Gourmet Burgers, Inc. (RRGB): Free Stock Analysis Report
Dutch Bros Inc. (BROS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).