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Investing.com -- Red Robin Gourmet Burgers Inc (NASDAQ:RRGB) stock jumped 11% on Wednesday after the restaurant chain announced its new "First Choice" strategic plan aimed at driving long-term shareholder value, while also providing an updated financial outlook.
The casual dining burger chain revealed initiatives focused on strengthening its balance sheet, enhancing marketing, investing in restaurant facilities and technology, and delivering value to guests. Management expressed confidence that the plan will result in sustainable guest count growth, increased profitability, and free cash flow generation.
Despite projecting a second-quarter comparable restaurant sales decrease of approximately 4%, which is slightly worse than previously expected 3% decline, Red Robin now expects its Adjusted EBITDA to exceed its prior guidance range of $13 million to $16 million.
"Our commitments to operational excellence and cost efficiency have delivered meaningful profitability improvements, with the Adjusted EBITDA we expect to report in the first half of 2025 already surpassing our full-year 2024 results," said Todd Wilson, Red Robin’s Chief Financial Officer.
The company’s "First Choice" plan consists of five key elements: maintaining operational efficiencies, driving traffic through marketing initiatives, managing expenses to reduce debt, investing in restaurant improvements, and creating a high-performance work environment.
Red Robin plans to tactically refranchise select company-owned restaurants and markets as part of its strategy to reduce debt and create financial flexibility for investments. The company expects to report its complete second-quarter results in mid-August.
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