- Red Robin released its Q2 results last month, reporting a top and bottom-line, with revenue of just ~$277 million, down 10% from Q2 2019 levels.
- These disappointing results were attributed to staffing challenges, commodity/wage inflation, one-time hiring costs, and jurisdictional capacity requirements, weighing on traffic and restaurant-level margins.
- Fortunately, the company has had some success hiring, and its Donatos roll-out has continued at a rapid pace, and locations with Donatos continue to outperform the system.
- Having said that, with Red Robin trading at more than 30x FY2023 earnings estimates, I still don't see enough of a margin of safety to justify investing at current levels.
For further details see:
Red Robin: Staffing Challenges Weigh On Q2 Results