Red Robin Gourmet Burgers (NASDAQ:RRGB) reported first-quarter financial results on Tuesday. The transcript from the company’s first-quarter earnings call has been provided below.
Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more.
The full earnings call is available at https://viavid.webcasts.com/starthere.jsp?ei=1755598&tp_key=ae5f2178ca
Summary
Red Robin Gourmet Burgers reported strong Q1 2026 results with improved traffic performance and the highest Q1 restaurant operating profit margin since 2021.
Same-store sales were down 0.6% due to a 1.6% decrease in traffic, but the average check increased by 1.0%, driven by the Big Yum Value platform.
The company’s First Choice Plan is delivering operational improvements, with labor efficiency initiatives saving 130 basis points year-over-year.
Restaurant-level operating margin improved by 50 basis points to 14.8%, the highest in five years, and adjusted EBITDA was in line with expectations.
The company is progressing with refranchising initiatives and plans to use proceeds to reduce debt and strengthen the balance sheet.
Red Robin maintains its full-year guidance for 2026, expecting comparable restaurant revenue growth of 0.5% to 1.5% and adjusted EBITDA between $70 million and $73 million.
Management highlights the success of targeted marketing and new product innovations, such as the Big Yum Value platform and Towering Sliders.
The company is continuing its Light Touch refresh program and technology upgrades to enhance the dining experience.
Full Transcript
OPERATOR
Good afternoon everyone and welcome to the Red Robin Gourmet Burgers first quarter 2026 earnings call. This conference is being recorded during Management’s presentation and in response to your questions they will be making forward looking statements among the Company’s business outlook and expectations. These forward looking statements and all other statements that are not historical facts reflect management’s beliefs and predictions as of today and therefore are subject to risks and uncertainties as described in the Company’s SEC filings. Management will also discuss non-GAAP financial measures as part of today’s conference call. These non-GAAP measures are not prepared in accordance with generally accepted Accounting principles, but are intended to illustrate alternative measures of the Company’s operating performance that may be useful. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in the Earnings release. The Company has posted its first quarter 2026 earnings release on its website at ir.redrobin.com on today’s call are Dave Pace, President and Chief Executive Officer Mark Graf, Chief Financial Officer and Chris Meyer, Interim Chief Financial Officer. Now I would like to turn the call over to Dave Pace.
Dave Pace (President and Chief Executive Officer)
Good afternoon everyone and thank you for your interest in Red Robin. I’m pleased to report that our first quarter results demonstrate continued improvement in the business, highlighted by our strongest traffic performance since the first quarter of 2023 and our highest Q1 restaurant operating profit margin since 2021. These results reinforce that the actions we’re taking to strengthen guest engagement are gaining traction. Our Big Yum Value platform continues to resonate with guests with high satisfaction scores and we’re seeing strong results across the system. In addition, our targeted first choice marketing efforts are improving both reach and brand awareness, helping us to engage guests more effectively to drive frequency. Importantly, the operational discipline embedded in our First Choice plan is delivering steady improvement across the P&L as well. Our teams remain focused on executing the fundamentals, enhancing the guest experience and positioning the business for sustainable growth. As it relates to our Q1 performance, same store sales were down 0.6% including a 1.0% increase in average check and a 1.6% decrease in traffic. This traffic result improved sequentially from Q4 and continued to narrow the traffic gap to the industry as compared to black box intelligence, reinforcing that our strategies are gaining traction despite a challenging macro environment. The current economic environment requires that we remain deliberate in highlighting value and disciplined in our approach to average check. Q1 was our third consecutive quarter where our check average increases were below the industry. Our PRUDENT approach to menu pricing, complemented by the expansion of our Big Yum platform, has positioned us for success and is reflected in our traffic momentum. Turning to profitability, we’re pleased with the continued incremental gains in 4 wall efficiency, including a 50 basis points improvement in restaurant level operating margin to 14.8%. This was our highest first quarter margin in five years. Our adjusted EBITDA was in line with our expectations and we remain on track for our full year objectives. With that, let me update you on our first choice plan and how we’re thinking about our strategic priorities for the remainder of the year. First, let’s start with Holdserve. Our team continues to do a great job sustaining the progress we’ve made in the past several quarters and this quarter is no different. During the first quarter, our labor efficiency initiatives drove approximately 130 basis points of year over year savings. Our labor percentage of 35.7% was our lowest first-quarter labor in three years. These improvements reflect the sustained accountability and ownership embedded in our managing partner model. What’s particularly encouraging is that we are achieving these efficiency gains without compromising the guest experience. Our satisfaction scores remain strong, reinforcing that operational excellence and genuine hospitality are not competing priorities, they’re complementary. Moving to our drive traffic pillar, we believe our value and innovation platforms are gaining traction with guests. The expanded Big Yum platform we launched in late January continues to address the need for value with the new offerings while serving as an incremental traffic driver. All in all, the six meal options across our $9.99 to $16.99 price range are strengthening our relevance with value seeking guests and supporting incremental traffic and trial. In total, our Big Yum offerings are mixing at over 13%, well within the expectations for this program. The platform’s appeal extends beyond burgers, including our hand breaded Classic Chicken sandwiches, Donato’s Pizza and Whiskey River Barbecue Chicken Wraps. Importantly, each meal includes our signature bottomless sides and beverages, reinforcing value while preserving the full Red Robin experience. Overall, the underlying traffic trends in the business are improving and our momentum is increasingly being driven by compelling platforms rather than relying on traditional discounting. Our deliberate barbell approach with the menu balances compelling value with higher priced indulgent options to expand guest reach across day parts and occasions. We believe this approach is building a more sustainable foundation for traffic generation. In addition, we continue to enhance our new product pipeline which provides additional opportunities to drive frequency. An example of this is our towering Sliders that we launched last month, which has generated record setting menu satisfaction scores and is driving incremental check growth. On the marketing front, our data driven First Choice strategy continues to gain traction. Our ability to deliver locally relevant messaging based on competitive dynamics in each trade area has improved both engagement and marketing efficiency. We’re seeing the benefits of this more precise, disciplined approach in our traffic performance and expect to build on this momentum as we refine our capabilities throughout the year. Now let me update you on our third pillar of the First Choice strategy, Find Money. I’m pleased to report that our momentum on corporate efficiency initiatives continues to deliver meaningful results. As we previously outlined, the G and A reductions we implemented in mid-2025 are providing sustained benefits and we remain on track to realize the full year step down we anticipated for 2026. Turning to our balance sheet optimization efforts, our tactical refranchising initiatives continues to move forward. We’re currently in the final stages of discussions with multiple parties and I’m pleased with both the pace of these conversations and the depth of engagement from prospective franchisees. These are sophisticated operators who recognize the operational progress we’ve made and see the opportunity to that our first choice strategy creates. The sustained level of interest we’re seeing reflects growing confidence in our system improvements and the strength of the Red Robin brand. I want to emphasize that we remain committed to being disciplined and selective in this process. Our objective is to partner with franchisees who share our commitment to operational excellence and guest experience while achieving terms that support our balance sheet objectives. We plan to use proceeds from any completed transactions to reduce debt and further strengthen our balance sheet. We look forward to providing further updates on this in the near future. Turning to our Fixed Restaurants pillar, we’re continuing our Light Touch refresh program in 2026. This initiative touches customer facing elements within our restaurants that can enhance the overall experience and support the quality of our food and service. We expect to have our first markets completed by the end of June. In addition to our facility refreshes, we’ve begun to roll out replacement devices for our server handheld technology and will shortly introduce …
This post was originally published here
