Preliminary fourth-quarter 2019 results for Red Robin Gourmet Burgers (NASDAQ: RRGB) are in, and they aren't great. Restaurant traffic was down 3.4%, and quarterly revenue fell 1.2% because of restaurant closures. It's something investors have come to expect, as revenue, net income, and comparable sales have all trended down in recent years. As a result, shares are still down over 60% from 2015 highs.
Red Robin knows it can't go on as it has over the last several years. To stage a comeback plan, the company hired Paul Murphy as CEO, a restaurant executive known for turnarounds. The board of directors also rejected a buyout offer from Vintage Capital, fully hitching the company's wagon to the comeback plan it outlined at the ICR Investor Conference.
But should investors buy it?