Red Robin Gourmet Burgers ( NASDAQ: RRGB ) shares dropped by double digits in Wednesday’s extended trading after the restaurant chain posted underdone earnings and updating full-year guidance.
For the second quarter, the Colorado-based burger chain cooked up a surprising $-0.75 in earnings per share, a loss five times larger than anticipated. Additionally, $288.7M in revenue for the quarter came in slightly lower than expectations. The company blamed higher commodity and wage rate inflation for the bulk of the bottom line losses, while repairs, maintenance, utilities, and marketing expenses also added to adverse impacts.
CEO Paul J. B. Murphy III noted that the company implemented a 2% price increase during the quarter, though it was not sufficient to offset the rising costs.
Moving forward, the company updated guidance to reflect mid-double digit commodity cost inflation, versus the previous guidance of low-double digit inflation. The company also trimmed its adjusted EBITDA forecast to $65M, versus a previous range of $80 to $90M.
Read more on the details of the results .
For further details see:
Red Robin shares reel as inflation impacts promote widening losses