Shares of the full-service restaurant chain, Red Robin Gourmet Burgers, Inc. (RRGB) have rallied about 31.9% over the past five trading sessions, as investors cast aside global macro jitters. However, despite robust momentum in its top-line, RRGB’s recent fourth-quarter performance missed the Street’s expectations.
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Revenue jumped 40.9% year-over-year to $283.4 million, but lagged expectations by $4.1 million. Net loss per share at $1.03, fell short of expectations by $0.42. Comparable restaurant revenue for the company surged 40.1% as compared to the year-ago period.
In a bid to create a digital ecosystem that drives traffic, order completion, and average guest check, RRGB soft-launched its new iOS and Android apps, a new loyalty program, and a new website ordering experience during the quarter.
Further, management noted that as the Omicron variant has subsided recently, the company is witnessing improved staffing levels, higher dine-in sales, and sustained off-premises volumes.
With these developments in mind, let us take a look at the changes in RRGB’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Red Robin Gourmet Burgers’ top risk category is Production, contributing 11 of the total 36 risks identified for the stock, compared to a sector average of 5 risk factors under the same category.
In its recent report, the company has added one key risk factor under the Production risk category.
RRGB highlighted that its ability to provide the desired experience to guests hinges on attracting and retaining a sufficient number of qualified management and operating staff. The company has witnessed and continues to see the impact of labor shortages and higher labor costs, which has and may continue to adversely impact its financials and operations.
Additionally, as RRGB employs a large workforce, wage and benefit-cost inflation or expansion of benefits mandates may negatively impact RRGB.
Hedge Fund Activity
According to TipRanks data, Wall Street’s top hedge funds have decreased holdings in Red Robin Gourmet Burgers by 50.6 thousand shares in the last quarter, indicating a negative hedge fund confidence signal in the stock.
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