RRGB earnings analysis
What we found in RRGB's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Red Robin delivered $277.6 million of second-quarter revenue, with comparable restaurant revenue up 1.3%, but reported EPS of $0.02 and net income of $0.4 million declined from $0.21 and $4.0 million, respectively, in the prior-year quarter. Restaurant-level margins improved modestly, yet operating margin fell to 2.2% from 3.5% and adjusted EBITDA declined 16% to $18.9 million. Liquidity and debt balances improved, but year-to-date operating cash flow fell to $14.5 million and the company remains dependent on completing the $96.0 million refranchising transactions to improve financial flexibility.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Comps turned positive despite store closures
- Second-quarter revenue was $277.6 million, down 2.1% year over year, while comparable restaurant revenue increased 1.3%. Franchise revenue grew 14.2% to $3.6 million, partly offsetting the 2.4% decline in restaurant revenue to $272.6 million.
- Restaurant-level margin expanded
- Restaurant-level operating profit margin improved to 14.7% from 14.5% year over year, supported by a 20-basis-point reduction in total restaurant operating costs to 85.3% of restaurant revenue. Labor costs improved to 35.6% from 35.7%.
- Liquidity position improved
- Cash and restricted cash increased to $32.5 million from $29.5 million at fiscal year-end, and total reported liquidity was approximately $47.8 million, including $25.0 million of unused revolver capacity.
- Debt balance declined modestly
- Outstanding Credit Facility borrowings declined to $167.2 million from $170.2 million at December 28, 2025. The company remained in compliance with all debt covenants as of July 12, 2026.
- Refranchising could strengthen flexibility
- Red Robin entered three agreements to refranchise 116 Company-owned restaurants for approximately $96.0 million. Management expects the transactions to close during fiscal 2026 and intends to use net proceeds primarily to repay Credit Facility borrowings.
- Capital spending was sharply lower
- Capital expenditures fell to $11.5 million year to date from $18.5 million in the prior-year period, with technology and infrastructure spending declining to $2.5 million from $8.8 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Profitability and EBITDA declined
- GAAP profitability deteriorated: second-quarter net income fell to $0.4 million from $4.0 million, while adjusted EBITDA declined 16% to $18.9 million from $22.4 million. Operating margin also fell to 2.2% from 3.5%.
- Operating cash flow weakened
- Year-to-date operating cash flow decreased to $14.5 million from $29.5 million, a $15.0 million reduction that management attributed primarily to working-capital changes. Although capital expenditures were $11.5 million, the lower cash generation reduces financial flexibility.
- Refranchising execution risk
- The three pending refranchising transactions cover 116 of 375 Company-owned restaurants and have aggregate consideration of approximately $96.0 million, but none had closed as of July 12, 2026. Delays, failed financing, landlord or lender consents, and continuing lease liabilities could prevent the expected liquidity benefits.
- Greater franchisee dependence
- If the pending transactions close, the franchised base would increase from 90 to 206 restaurants. Greater dependence on franchisees could expose Red Robin to operating, reputational, royalty-collection, and franchisee financial-distress risks.
- Refinancing and rate exposure
- The Credit Facility matures on September 3, 2027, with $167.2 million outstanding as of July 12, 2026. A 1.0% change in the effective interest rate would change annualized pretax interest expense by approximately $1.7 million.
- Commodity and marketing cost pressure
- Cost pressure remains evident: cost of sales increased to 23.5% of restaurant revenue from 23.3%, primarily due to commodity-price inflation, while selling expense rose 63.2% to $10.4 million because of higher paid-media spending.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.02
- Operating margin
- 2.2%
- Segment
- One operating and one reportable segment; no separate segment revenue breakdown disclosed.
What they said about what is next.
The 10-Q provides no quantitative revenue or EPS guidance. Management expects the three refranchising transactions to close during fiscal 2026 and believes available liquidity will meet anticipated working-capital and capital-expenditure needs for the next 12 months. Numeric fiscal 2026 guidance was addressed in the earnings release rather than this filing.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 19, 2026
- Red Robin Gourmet Burgers, Inc. reported a Q1 2026 revenue of $378.3M, surpassing prior estimates of $365.34M, but marking a decline compared to $392.4M in Q1 2025. The company achieved an EPS of $0.13, showing a…
- 10-K · February 25, 2026
- Red Robin launched its First Choice strategic plan in July 2025 and entered fiscal 2025 with a 475-unit footprint (385 company‑owned, 90 franchised). Sales were roughly stable year-over-year (fiscal 2025 quarterly…
- 10-Q · November 10, 2025
- Red Robin reported total revenues of $265,128,000 for the twelve weeks ended October 5, 2025, down from $274,638,000 a year ago, with gross margin modestly compressing to 75.4% (from 76.3%). The company generated an…
- 10-K · February 28, 2024
- Red Robin (10-K for fiscal year ended December 31, 2023) frames 2023 as a strategic reset focused on its North Star five-point plan to drive operations, guest experience, cost reduction, guest engagement, and comparable…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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