Shares of the burger chain Red Robin were down more than 23% in pre-market trade on Thursday after reporting second-quarter profit and sales that missed expectations.
Adjusted earnings per share for Q2 came in at $US0.68, way below estimates for $US0.90. Earnings were down from $US0.77 a year ago.
Revenue was $US256.1 million, missing expectations for $US263.37. On a comparable restaurant basis, revenue increased 1.2%.
Red Robin also said that restaurant-level operating profit, as a per cent of restaurant revenue, declined to 22.2% from 23.3%. The company said “lower margins resulted primarily from higher food and beverage costs and, to a lesser extent, higher other operating costs and occupancy as a percentage of sales.”
“Although we are satisfied with our top line performance through the first half of the year, we were disappointed that our marketing efforts in the second quarter did not produce the desired results in an intensely competitive environment,” said Steve Carley, Red Robin Gourmet Burgers CEO.
For the full year, Red Robin expects comparable restaurant revenue to grow by low-single digits.
The disappointing report from Red Robin is the latest in a series of reports from companies highly exposed to consumer spending that have disappointed.
Earlier on Thursday, Wal-Mart reported disappointing earnings and cut its outlook for the the rest of the year. And Wal-Mart’s report comes on the heels of Wednesday’s July retail sales report that showed sales were flat over June, the worst report in six months.