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Red Robin Gourmet Burgers Inc. is struggling to employ enough workers during the COVID-19 pandemic, and the results showed up in the restaurant chain’s earnings Wednesday.
Red Robin
RRGB,
reported a second-quarter loss of $5 million, or 32 cents a share, on sales of $277 million, up from $160.1 million in the same quarter a year ago, when pandemic restrictions shuttered many eateries. After adjusting for costs related to COVID-19, restaurant closings and refranchising and other charges, Red Robin reported a loss of 22 cents a share, an improvement from an adjusted loss of $3.31 a share last year.
Analysts expected more drastic improvement from last year, however. On average, analysts were projecting Red Robin to break even on an adjusted basis with sales of $280 million. Shares dropped nearly 8% in after-hours trading Wednesday following release of the results.
Chief Executive Paul Murphy admitted in a statement that the financial performance was “below our expectation,” and said a contributing factor was “challenging labor availability which resulted in reduced operating hours to ensure a quality guest experience and reduce impact on our restaurant management teams.”
“Notably, we generated strong sales and margins at restaurants where staffing levels supported elevated traffic compared to 2019,” Murphy continued. “Specific initiatives that are addressing our staffing needs include national hiring events, technology enhancements to the application and hiring processes, and incremental hiring and training resources to grow staffing levels above 2019.”
Red Robin continued to give limited guidance for the rest of the year that did not include any goal for revenue nor profit. Executives were expected to discuss the results in a conference call scheduled for 5 p.m. Eastern.
Red Robin’s stock has more than doubled in the past year, gaining 159.2% as the S&P 500 index
SPX,
has gained 31.2%.
