Red Robin Gourmet Burgers Q2 Earnings Call Highlights

Red Robin Gourmet Burgers NASDAQ: RRGB reported second-quarter 2026 comparable sales growth and improved restaurant-level margins as the casual-dining chain continued to invest in value offerings, marketing and operational efficiency under its “First Choice” plan. Chief Executive Officer Dave Pace said same-store sales increased 1.3% during the quarter, while traffic was effectively flat, down 20 basis points. The traffic result outperformed the industry by 40 basis points, according to Black Box Intelligence, and represented the company’s best traffic performance since the first quarter of 2023.

Pace said Red Robin increased its share of visits by 80 basis points in trade areas with competitors. He attributed part of the performance to the Big Yummm Burger Deal, a value platform that includes the company’s bottomless sides and beverages, as well as targeted marketing intended to improve local awareness and guest frequency.

Total second-quarter revenue was $278 million, down $6.1 million from the prior-year period. Chief Financial Officer Mark Graff said the decline primarily reflected restaurant closures, partly offset by the increase in comparable restaurant sales. Comparable sales, excluding deferred loyalty revenue, rose 1.3%. The result reflected a 1.5% increase in average check and flat traffic. The average-check gain included a 3.3% price increase, offset by a 1.8% decline in mix and discounts, which Graff said was driven largely by the Big Yummm Burger Deal. Management said it has sought to maintain value for guests while using pricing cautiously. Pace said the second quarter marked the fourth consecutive quarter in which Red Robin’s average-check increase trailed the industry.

Restaurant-level operating margin increased 20 basis points from the prior year to 14.7%, the company’s highest second-quarter margin in four years. Graff said higher average check, cost savings and labor efficiencies partly offset inflation. Adjusted EBITDA was $18.9 million, down $3.5 million from the prior-year quarter. The decline was primarily due to a $4 million year-over-year increase in marketing spending. Selling expense rose to $10.4 million from $6.4 million a year earlier as Red Robin invested in the Big Yummm Burger Deal and personalization efforts.

Pace said labor-efficiency programs produced approximately 50 basis points of year-over-year savings. He pointed to the company’s managing partner model, which directly rewards restaurant leaders for improvements at their locations, as an important contributor to those savings. The company said guest satisfaction scores remained strong while it pursued efficiencies. Pace also said hourly and restaurant-management turnover remained at historically low levels, while employee engagement scores were above industry ben...