Red Robin Gourmet Burgers (NASDAQ: RRGB) reported Q4 EPS of $0.78, $0.24 better than the analyst estimate of $0.54. Revenue for the quarter came in at $342.4 million versus the consensus estimate of $330.29 million.

Financial Highlights for the 13 Weeks Ended December 31, 2017 Compared to the 12 Weeks Ended December 25, 2016

• Total revenues were $342.4 million, an increase of 17.5%;
• Net income was $8.8 million compared to net loss of $8.8 million;
• Comparable restaurant revenue increased 2.7% (using constant currency rates);
• Comparable restaurant guest counts increased 1.9%;
• Off-premise increased to 8.3% of total food and beverage sales compared to 5.7%;
• Adjusted EBITDA was $35.8 million compared to $29.2 million (see Schedule III);
• GAAP earnings per diluted share were $0.68 compared to GAAP loss per diluted share of $0.68; and
• Adjusted earnings per diluted share were $0.78 compared to $0.35 (see Schedule I).

Outlook for 2018

• The Company expects comparable restaurant sales growth of 50 to 150 basis points, and operating weeks to decline 1%, as a result of having only 52 weeks in 2018 compared to 53 weeks in 2017, offset by the impact of new unit growth in 2017 and 2018. As a result, 2018 total revenue is projected between a decline of 50 basis points and an increase of 50 basis points.
• Cost of sales, as a percentage of restaurant revenue, is projected to be higher by 50 to 100 basis points versus 2017 due to the onset of a moderately inflationary commodity environment.
• Restaurant labor costs, as a percentage of restaurant revenue, are projected between an increase of 25 basis points and a decrease of 25 basis points, driven by minimum wage increases in more highly penetrated markets and restaurant manager bonuses planned at target levels, offset by the effect of improvements in labor productivity.
• Other operating expenses are expected to be flat to down 50 basis points, due primarily to lower repair and maintenance costs.
• Depreciation and amortization is projected to be approximately $95 million.
• General and administrative expense is projected to be $85 to $90 million.
• Selling expense, which includes the consolidation of all national and local marketing activities, is expected to be up slightly as a percentage of restaurant revenue.
• Pre-opening costs are estimated to be approximately $3 million due to the reduced number of new restaurant openings.
• The Company’s income tax rate is expected between 0% and 5%.
• Earnings per diluted share is projected to range from $2.40 to $2.80. The Company expects Q1 earnings per diluted share between $0.60 and $0.80.
• Overall capital expenditures are projected between $65 million and $75 million. The Company plans to add approximately three to five net Red Robin locations in 2018.

The sensitivity of the Company’s earnings per diluted share to a 1% change in guest counts for fiscal year 2018 is estimated to be approximately $0.45 on an annualized basis. Additionally, a 10 basis point change in restaurant-level operating profit margin is expected to impact earnings per diluted share by approximately $0.10, and a change of approximately $135,000 in pre-tax income or expense is equivalent to approximately $0.01 per diluted share.

GUIDANCE:

Red Robin Gourmet Burgers sees Q1 2018 EPS of $0.60-$0.80, versus the consensus of $1.14.

For earnings history and earnings-related data on Red Robin Gourmet Burgers (RRGB) click here.