Casual dining restaurant operator
Red Robin Gourmet Burgers Inc.
) reported adjusted earnings of 59 cents per share in the fourth
quarter of 2012; way ahead of the Zacks Consensus Estimate of 44
cents as well as the year-ago quarter's earnings of 28 cents per
share. Results in the quarter benefited from high traffic and
margin expansion. In the full year of 2012, adjusted earnings
were $2.06 per share versus $1.58 per share in the prior
On a reported basis, in the fourth quarter, earnings were 45
cents per share versus 20 cents per share in the year earlier
quarter. In 2012, earnings of $1.93 per share outpaced the
prior-year level of $1.34 per share.
The company reported total revenue of $240.7 million in the
fourth quarter, up 16.8% year over year and surpassed the Zacks
Consensus Estimate of $234 million. For full year 2012, revenues
increased 6.8% to $977.1 million year over year.
During the quarter, restaurant sales jumped 16.9% from the
year-ago quarter to $236.7 million and franchise royalties and
fees revenues were up 15.4% year over year to $4.0 million.
Company-owned restaurants' comparable restaurant sales crept
up 1.4% year over year with a 0.3% rise in guest count and a 1.1%
increase in average guest check.
Restaurant operating margin enhanced 70 basis-points (bps) to
20.6% at company-owned restaurants, benefiting from a drop in
cost of sales and rise in sales mix offsetting increased cost of
General and administrative expenses in the quarter were up
7.4% to $20.5 million. Selling costs amounted to $6.4 million, up
40.8% year over year with the rise in marketing expenses.
Red Robin ended the quarter with cash and cash equivalents of
$22.4 million, total outstanding debt of $135.0 million and
shareholders' equity of $307 million.
The company bought back 281,000 shares worth $8.6 million in
the fourth quarter and nearly 803,000 shares at the cost of $24.3
million in 2012.
During the quarter, Red Robin unveiled three new units, with
one mid-sized prototype restaurant. During the quarter, one
franchised restaurant closed in the prior-quarter, was reopened.
Red Robin currently operates 339 restaurants, out of which five
are Red Robin's Burger Works restaurants and the rest are
For 2013, Red Robin expects comps to grow by 2.5% to 3% with the
rise in prices, items sold per guest and higher traffic.
Restaurant operating margins are estimated to be 20.7%,
consistent or up 10 basis points year over year due to the rise
in commodity costs.
General and Administrative costs are projected to be within
$83 million and $84 million in 2013. Moreover, the income tax
rate is likely to fall between 23% and 24%. Capital expenditures
in the year will be in the range of $50 million and $55
The casual dining restaurant operator remains on track to
unveil 20 units with five Red Robin's Burger Works to open in
Higher revenues coupled with cost containment efforts and
marketing expertise are the driving forces for the company. We
remain positive on the stock based on continuous focus on
enhancement of shareholders' value and unit growth. However,
lower consumer spending amid uncertain economic environment and
stiff competition remain headwinds.
Red Robin currently retains a Zacks Rank #1 (Strong Buy).
AFC Enterprises Inc.
) recently declared its preliminary fourth quarter and full year
2012 results. The company projects its adjusted earnings per
share for the full year of 2012 to be within $1.23-$1.24, up from
99 cents in 2011. AFC also provided an optimistic outlook for
2013. AFC currently holds a Zacks Rank #2 (Buy).
Other restaurateurs, which are expected to perform well moving
Krispy Kreme Doughnuts, Inc.
Burger King Worldwide, Inc.
). Both carry a Zacks Rank #2 (Buy).
AFC ENTERPRISES (AFCE): Free Stock Analysis
BURGER KING WWD (BKW): Free Stock Analysis
KRISPY KREME (KKD): Free Stock Analysis
RED ROBIN GOURM (RRGB): Free Stock Analysis
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