--- title: "Red Robin Gourmet Burgers, Inc. Reports Results For The Fiscal Third Quarter Ended October 3, 2021" url: https://burnaze.com/article/e07ce529-196a-46bc-a358-09097784a0e5 source: "Franchising.com" original_url: https://www.franchising.com/news/20211111_red_robin_gourmet_burgers_inc_reports_results_for_the_fiscal_third_quarter_.html category: "Burger" industry: "Restaurants" segment: "Burger" published: 2021-11-11T12:00:00.000Z modified: 2026-11-01T01:11:59.143Z image: https://images.unsplash.com/photo-1561758033-d89a9ad46330?w=1600&q=80&auto=format&fit=crop --- # Red Robin Gourmet Burgers, Inc. Reports Results For The Fiscal Third Quarter Ended October 3, 2021 **TL;DR:** Red Robin Gourmet Burgers, Inc. reported positive sales and traffic trends in the third quarter of 2021, despite challenges due to the Delta variant and staffing issues. The company's comparable restaurant revenue increased 34.3% over the same period in 2020, and increased 0.6% compared to the same period in 2019. *originally published in Franchising.com on 2021-11-11. [Read the original](https://www.franchising.com/news/20211111_red_robin_gourmet_burgers_inc_reports_results_for_the_fiscal_third_quarter_.html).* ## Key facts - Red Robin's Q3 revenue was $270.2 million - Comparable restaurant revenue increased 34.3% over Q3 2020 - Off-premises sales sustained at $81.0 million ## Story GREENWOOD VILLAGE, Colo. - (BUSINESS WIRE) - November 10, 2021 - Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) ("Red Robin" or the "Company"), a full-service restaurant chain serving an innovative selection of high-quality gourmet burgers in a family-friendly atmosphere, today reported financial results for the quarter ended October 3, 2021. ## Key Highlights **Key Highlights** - Restaurant revenue of $270.2 million and Restaurant Level Operating Profit as a percentage of restaurant revenue (a non-GAAP metric) of 12.5%; - Third quarter 2021 comparable restaurant revenue(1) increased 34.3% over the same period in 2020, and increased 0.6% compared to the same period in 2019; - Improving comparable restaurant revenue(1) during the Company's third fiscal quarter, and positive 4.0% for the first period of the fourth fiscal quarter(3) compared to 2019, with the improving trajectory driven by strategic growth initiatives, and improvements in staffing levels; - Off-premises sales continue to sustain at high levels and comprised $81.0 million, $80.7 million and $35.0 million of comparable restaurant revenue for the third quarters of 2021, 2020 and 2019, respectively; - On track to launch two new mobile apps, iOS and Android, a new website ordering experience, and a new loyalty platform before the end of the year, creating an integrated digital ecosystem which we expect will improve traffic, order completion and average guest check; and - Restaurants that have been serving Donatos® pizza prior to 2021 are continuing to benefit from growing incremental sales beyond their first year as operations mature and brand affinity grows, with comparable restaurant revenue up 8.7% in the third quarter compared to 2019 in restaurants without supply chain impacts. ## Comparable Revenue **Comparable Restaurant Revenue for Third Quarter 2021 and First Fiscal Period for Fourth Quarter 2021 Compared to 2020 and 2019** The following table presents comparable restaurant revenue for the eighth, ninth, and tenth fiscal periods that comprised our third fiscal quarter, as well as the eleventh fiscal period, the first fiscal period of our fourth fiscal quarter: Paul J. B. Murphy III, Red Robin’s President and Chief Executive Officer, said, "Our confidence is strengthened by the positive trajectory in our sales and traffic trends over the past eight weeks, despite softness earlier in the third quarter due to concerns about the Delta variant and continued staffing and supply chain challenges. In fact, we believe there is more opportunity for upside through the remainder of the year and beyond by ensuring that each restaurant is effectively managed, optimally staffed, and our Team Members are well trained, enabling us to capture the full benefits of our proven strategic growth initiatives." Murphy continued, "We have now sustained six consecutive quarters of off-premises sales at more than double 2019 levels, even as Guests return for in-person dining, while we continue to benefit from our value proposition and menu offerings, and our enhancements to the efficiency and accuracy of this burgeoning channel. Additionally, our successes with key initiatives this year, including continued Donatos pizza expansion, advancements in our digital ecosystem, and menu innovation demonstrate how we are differentiating Red Robin, expanding our market share and frequency, and supporting the ongoing execution of our business strategy." ## Financial Summary **Third Quarter 2021 Financial Summary Compared to 2020 and 2019** The following table presents financial highlights for the fiscal third quarter of 2021, compared to results from the same period in 2020 and 2019: **Third Quarter 2021 Operating Results** Comparable restaurant revenue(1) increased 34.3% in the third quarter of 2021 compared to the same period a year ago, driven by a 22.5% increase in Guest count and a 11.8% increase in average Guest check. The increase in average Guest check resulted from a 3.5% increase in pricing, and an 8.4% increase in menu mix, partially offset by a 0.1% decrease from higher discounts. The increase in menu mix was primarily driven by higher sales of beverages and our limited time menu offerings. The increase in Net loss compared to 2020 was primarily due to a lower effective tax benefit, higher marketing spend, wage rates, and hiring and training costs, partially offset by a $73.2 million increase in restaurant revenue, primarily driven by favorable guest counts, menu mix, and pricing, lower labor costs due to staffing shortages and sales leverage. The increase in Adjusted EBITDA(2) was due to the aforementioned factors less the impact of Interest expense, Income tax benefits, and Depreciation and amortization, and Other charges. $3.1 million of transitory labor and other operating costs were incurred due to staffing challenges, including hiring and training costs, temporarily outsourced janitorial costs, one time bonuses, and overtime pay. The increase in Net loss compared to 2019 was primarily due to a $19.7 million decrease in restaurant revenue due to closed restaurants, higher third party delivery fees and supplies due to higher off-premises sales volumes and mix, increased wage rates and staffing costs, partially offset by pricing, menu mix, occupancy expenses for permanently closed restaurants and restructured leases, reduced headcount at the Restaurant Support Center, and reduced marketing spend associated with our emphasis on digital media in 2021. The decrease in Adjusted EBITDA(2) compared to 2019 was due to the aforementioned factors less the impact of Interest expense, Income tax benefits, and Depreciation and amortization, and Other charges. ## Balance Sheet **Balance Sheet and Liquidity** The Company made net borrowings of $1.6 million on its Amended and Restated Credit Agreement (the "Credit Facility") during the third quarter of 2021. As of October 3, 2021, the Company had outstanding borrowings under its credit facility of $155. 5 million, in addition to amounts issued under letters of credit of $8.6 million, and liquidity of approximately $75.2 million including cash on hand and available borrowing capacity under its credit facility. After giving effect to the $30 million capacity reduction on its revolving line of credit, effective on October 31, pursuant to the Second Amendment to our Credit Facility. The Company has made net repayments of $50.5 million on its Credit Facility since December 29, 2019. In response to the continued uncertainty around the impact of industry labor and supply chain challenges as well as the COVID-19 Delta variant, the Company amended its current credit facility on November 9, 2021 to obtain additional flexibility to continue to implement our business strategy. The Company anticipates refinancing its Credit Facility in 2022. **Outlook for 2021 and Guidance Policy** The Company provides guidance as it relates to select information related to the Company's financial and operating performance, and such measures may differ from year to year. Due to the uncertainty caused by the on-going COVID-19 pandemic, limited guidance is being provided for fiscal year 2021. The Company currently expects the following for full year 2021: - Mid-single digit commodity and wage inflation. - Selling, general and administrative costs between $120 and $130 million. - Capital expenditures of $45 to $55 million, including continued investment in maintaining our restaurants and systems capital, Donatos® expansion to approximately 120 restaurants, including approximately 40 restaurants in our fourth fiscal quarter, digital guest and operational technology solutions, and off-premises execution enhancements. **Investor Conference Call and Webcast** Red Robin will host an investor conference call to discuss its third quarter 2021 results today at 5:00 p.m. ET. The conference call can be accessed live over the phone. The replay will be available through Wednesday, November 17, 2021. **RED ROBIN GOURMET BURGERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)** In addition to the results provided in accordance with Generally Accepted Accounting Principles ("GAAP") throughout this press release, the Company has provided non-GAAP measurements which present the twelve and forty weeks ended October 3, 2021, October 4, 2020 and October 6, 2019(1) Net (loss) income and basic and diluted (loss) earnings per share, excluding the effects of goodwill impairment, asset impairment, litigation contingencies, board and stockholder matters costs, restaurant closure and refranchising costs, severance costs, executive retention costs, COVID-19 related costs, and related income tax effects. The Company believes the presentation of net loss and loss per share exclusive of the identified items gives the reader additional insight into the ongoing operational results of the Company. This supplemental information will assist with comparisons of past and future financial results against the present financial results presented herein. Income tax effect of reconciling items was calculated based on the change in the total tax provision calculation after adjusting for the identified item. The non-GAAP measurements are intended to supplement the presentation of the Company’s financial results in accordance with GAAP. **Reconciliation of Non-GAAP Restaurant-Level Operating Profit to Loss from Operations and Net (Loss) Income (In thousands, unaudited)** The Company believes restaurant-level operating profit is an important measure for management and investors because it is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. The Company defines restaurant-level operating profit to be restaurant revenue minus restaurant-level operating costs, excluding restaurant impairment and closure costs. The measure includes restaurant-level occupancy costs that include fixed rents, percentage rents, common area maintenance charges, real estate and personal property taxes, general liability insurance, and other property costs, but excludes depreciation related to restaurant equipment, buildings, and leasehold improvements. Restaurant impairment costs are excluded, because, similar to depreciation and amortization, they represent a non-cash charge for the Company's investment in its restaurants and not a component of the efficiency of restaurant operations. Restaurant-level operating profit is not a measurement determined in accordance with GAAP and should not be considered in isolation, or as an alternative, to loss from operations or net loss as indicators of financial performance. Restaurant-level operating profit as presented may not be comparable to other similarly titled measures of other companies in the Company's industry. The table below sets forth certain unaudited information for the twelve and forty weeks ended October 3, 2021, October 4, 2020, and October 6, 2019(2) expressed as a percentage of total revenues, except for the components of restaurant-level operating profit that are expressed as a percentage of restaurant revenue. The Company defines EBITDA as net loss before interest expense, income taxes, and depreciation and amortization. EBITDA and adjusted EBITDA are presented because the Company believes investors' understanding of its performance is enhanced by including these non-GAAP financial measures as a reasonable basis for evaluating its ongoing results of operations excluding the effects of goodwill impairment, asset impairment, litigation contingencies, board and stockholder matters costs, restaurant closure and refranchising costs, severance costs, executive retention costs and COVID-19 related costs. EBITDA and adjusted EBITDA are supplemental measures of operating performance that do not represent and should not be considered as alternatives to net loss or cash flow from operations, as determined by GAAP, and the Company's calculation thereof may not be comparable to that reported by other companies in its industry or otherwise. Adjusted EBITDA further adjusts EBITDA to reflect the additions and eliminations shown in the table below. The use of adjusted EBITDA as a performance measure permits a comparative assessment of our operating performance relative to the Company's performance based on its GAAP results, while isolating the effects of some items that vary from period to period without any correlation to core operating performance. Adjusted EBITDA as presented may not be comparable to other similarly-titled measures of other companies, and the Company's presentation of adjusted EBITDA should not be construed as an inference that its future results will be unaffected by excluded or unusual items. The Company has not provided a reconciliation of its adjusted EBITDA outlook to the most comparable GAAP measure of Net loss. Providing Net loss guidance is potentially misleading and not practical given the difficulty of projecting event-driven transactional and other non-core operating items that are included in Net loss, including asset impairments and income tax valuation adjustments. The reconciliations of adjusted EBITDA to Net loss for the historical periods presented below are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance. ## Entities - Franchising.com (publication) - Restaurants (sector) - Red Robin (company) - Donatos Pizza (company) - Red Robin Gourmet Burgers, Inc. (company) - q3 results (topic) - Delta (company) - digital ecosystem (topic) - sales trends (topic) - staffing issues (topic) - delta variant (topic) --- Originally reported by Franchising.com (https://www.franchising.com/news/20211111_red_robin_gourmet_burgers_inc_reports_results_for_the_fiscal_third_quarter_.html). Summarized by Burnaze (https://burnaze.com/article/e07ce529-196a-46bc-a358-09097784a0e5).