- Red Robin Gourmet released its Q1 results in late May, reporting revenue a 9% decrease from Q1 2019 levels.
- This was despite capacity of ~50% for for indoor dining, suggesting the potential for FY2022 revenues to recovery to FY2019 levels once restrictions ease further.
- However, staffing in the sector has been more difficult, and we are seeing increases in food costs, with wholesale food prices soaring in May, which could weigh on margins.
- At a valuation of more than 31x FY2022 earnings estimates at a share price of $34.00, I don't see any margin of safety buying the stock at current levels.
For further details see:
Red Robin: An Expensive Bet On The Restaurant Sector