Red Robin Gourmet Burgers, Inc. (RRGB) swung to a net loss for the quarter ended Dec. 25, 2016. The company has made a net loss of $8.75 million, or $ 0.68 a share in the quarter, against a net profit of $11.69 million, or $0.84 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $4.52 million, or $0.35 a share compared with $12.04 million or $0.86 a share, a year ago.
Revenue during the quarter went up marginally by 1.80 percent to $291.46 million from $286.30 million in the previous year period. Gross margin for the quarter contracted 120 basis points over the previous year period to 42.79 percent. Operating margin for the quarter stood at negative 5.07 percent as compared to a positive 5.24 percent for the previous year period.
Operating loss for the quarter was $14.78 million, compared with an operating income of $15.02 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $30.15 million compared with $34.98 million in the prior year period. At the same time, adjusted EBITDA margin contracted 187 basis points in the quarter to 10.34 percent from 12.22 percent in the last year period.
"The changes we made to streamline the team and focus on value, speed and service in the back half of last year have strengthened our business and resulted in significantly improved guest service scores," said Denny Marie Post, Red Robin Gourmet Burgers, Inc. chief executive officer. "We began this year piloting several off-premise growth initiatives. We will roll out the most promising programs as quickly as possible to support year-over-year earnings growth in the back half of 2017, heavily weighted to the fourth quarter as these programs come together."
For the fiscal year 2017, Red Robin Gourmet Burgers, Inc. forecasts revenue to grow in the range of 6 percent to 8 percent.
For the first-quarter 2017, Red Robin Gourmet Burgers, Inc. expects diluted earnings per share to be in the range of $0.40 to $0.60.
Working capital remains negative
Working capital of Red Robin Gourmet Burgers, Inc. was negative $48.16 million on Dec. 25, 2016 compared with negative $80.93 million on Dec. 27, 2015. Current ratio was at 0.66 as on Dec. 25, 2016, up from 0.54 on Dec. 27, 2015.
Cash conversion cycle (CCC) has increased to 8 days for the quarter from 5 days for the last year period. Days sales outstanding were almost stable at 3 days for the quarter, when compared with the last year period.
Days inventory outstanding was almost stable at 8 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went down to 3 days for the quarter from 6 for the same period last year.
Debt increases substantially
Red Robin Gourmet Burgers, Inc. has witnessed an increase in total debt over the last one year. It stood at $347.18 million as on Dec. 25, 2016, up 65.08 percent or $136.86 million from $210.32 million on Dec. 27, 2015. Total debt was 37.80 percent of total assets as on Dec. 25, 2016, compared with 25.04 percent on Dec. 27, 2015. Debt to equity ratio was at 1 as on Dec. 25, 2016, up from 0.56 as on Dec. 27, 2015.
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