管理層發言
Good afternoon, everyone, and welcome to the Red Robin Gourmet Burgers Incorporated 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 about 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 David A. Pace, President and Chief Executive Officer; Mark E. Graff, Chief Financial Officer; and Christopher Adkins Meyer, Interim Chief Financial Officer. Now I would like to turn the call over to David A. Pace.
Good afternoon, everyone, and thank you for your interest in Red Robin. I am 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 are taking to strengthen guest engagement are gaining traction. Our Big Yummm value platform continues to resonate with guests with high satisfaction scores and we are 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% 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 Yummm platform has positioned us for success and is reflected in our traffic momentum. Turning to profitability, we are pleased with the continued incremental gains in four-wall efficiency, including a 50 basis point 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 are thinking about our strategic priorities for the remainder of the year. First, let's start with hold serve. Our team continues to do a great job sustaining the progress we have 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 is 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 are complementary. Moving to our drive traffic pillar, we believe our value and innovation platforms are gaining traction with guests. The expanded Big Yummm 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 Yummm 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 choice across dayparts 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 are 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 am pleased to report that our momentum and corporate efficiency initiatives continue to deliver meaningful results. As we previously outlined, the G&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 continue to move forward. We are currently in the final stages of discussions with multiple parties and I am 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 have made and see the opportunity that our First Choice strategy creates. The sustained level of interest we are 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 fix restaurants pillar, we are 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 have begun to roll out replacement devices for our server handheld technology and we will shortly introduce an upgraded version of our Ziosk tabletop devices. We believe that both of these actions will improve server efficiency, order accuracy, and speed of service, returning the gift of time benefit that Red Robin has historically been known for. Lastly, let me quickly touch on our win together pillar. As I reach the one-year mark as CEO of Red Robin, what stands out most for me is the growing sense of ownership and pride across our restaurants. Our team members are not simply executing initiatives; they are owning the challenge, putting guests at the front of everything we do, and actively contributing ideas that have improved operations and enhanced the guest experience. We also recognize that the rate of change continues to accelerate and evolve, and we need to adapt with it. Technology and AI are at the forefront of that discussion, and our team is constantly challenging the status quo to identify ways to enhance our capabilities, reduce friction, and differentiate ourselves in the marketplace. Last fall, we introduced an enterprise version of the ChatGPT AI platform, and we are seeing meaningful adoption of the tools across the enterprise but especially within the field. Our managing partners are actively leveraging these tools to optimize labor scheduling, manage food costs, and enhance guest service delivery, all of which are contributing to the operational efficiencies reflected in our results. On the people front, our focus on creating a supportive work environment continues to pay dividends. Hourly turnover remains at historically low levels, and employee engagement scores are tracking positively above industry benchmarks. This stability strengthens our ability to deliver the consistent high-quality experience our guests expect. As we progress through 2026, we remain committed to fostering an environment where great people can build meaningful careers while driving the innovation and execution that will differentiate Red Robin in the marketplace. To our entire Red Robin team, thank you for your continued commitment to our guests and to each other. The operational discipline and guest-first mindset you demonstrate every day are the foundation of our progress, and I am grateful for your commitment as we execute our First Choice plan. Before I turn the call over to Mark, I would like to extend my sincere thanks to Christopher Adkins Meyer for stepping out of retirement to serve as our interim CFO. Since December, Christopher has provided strong continuity, steady leadership, and valuable guidance to our finance team and the entire organization, including me personally. I would also like to welcome our new CFO, Mark E. Graff, who just joined us earlier this month. With more than a decade at Bloomin' Brands, he brings deep financial expertise and direct operational leadership to the team. I had the privilege to work with Mark when we were both at Bloomin'. He has been working closely with Christopher over the past several weeks as he comes up to speed, and we look forward to his leadership and perspective as we continue to execute on our First Choice plan. With that, I will turn the call over to Mark to review our first quarter results.
Thanks, David, for the kind words and good afternoon, everyone. I would like to start by providing a recap of our financial performance for the fiscal first quarter of 2026. Total revenues in Q1 were $378 million, a decrease of $14 million from 2025. This change in revenue was primarily due to the impact of restaurant closures and a decrease in comp sales. Comp sales excluding the impact of deferred loyalty revenue were down 60 basis points in Q1. Q1 comp sales included a 1% increase in average check, offset by a 1.6% decline in traffic. The 1% increase in average check consisted of a 3.1% increase in price offset by a 2.1% decrease in mix and discounts, driven largely by the impact of our Big Yummm value offerings. As it relates to other aspects of our Q1 financial performance, restaurant-level operating margin was 14.8%, an increase of 50 basis points compared to the first quarter of 2025. The benefits of cost savings and labor efficiencies, check average increase, and restaurant closures were offset by inflation and lower traffic. As it relates to our commodity basket, as of the end of the first quarter, we were approximately 60% locked on our 2026 commodity needs. General and administrative costs were $23 million as compared to $27 million in the first quarter of 2025. The $4 million reduction is primarily due to reduced people costs from our corporate efficiency initiative and timing of corporate events. Selling expenses were $13 million as compared to $9 million in the first quarter of 2025. Adjusted EBITDA was $27 million in the first quarter of 2026, a decrease of $600 thousand versus the first quarter of 2025. As it relates to our balance sheet and capital structure, we ended the first quarter with $24 million of cash and equivalents, $10 million of restricted cash, and $17 million available borrowing capacity under our revolving line of credit. Turning to our outlook, we are maintaining the full-year guidance for 2026. Please note that our outlook does not include any impact from the tactical refranchising initiatives. First, we expect comparable restaurant revenues to be between 0.5% to 1.5% excluding the impact of deferred loyalty revenue. Second, restaurant-level operating profit margin of approximately 13%. Third, we expect adjusted EBITDA of between $70 million and $73 million. Finally, we expect capital expenditures to be between $25 million and $30 million. In summary, our first quarter performance and our continued improvement in our business fundamentals give us confidence as we look ahead to the remainder of 2026. We will remain disciplined in executing against the First Choice plan and continue strengthening the operational and financial foundation of the company. David, I will now turn the call back to you.
Thanks, Mark. We believe our first quarter performance validates the strategic direction we have set with our First Choice plan. Across all five pillars of our plan, we are executing with discipline by 1) holding serve on operational efficiencies while maintaining guest satisfaction; 2) driving traffic through our expanded Big Yummm value platform and data-driven marketing; 3) finding money through our organizational efficiencies and our strategic refranchising initiative that will strengthen our balance sheet; 4) fixing our restaurants with targeted refreshes and technology enhancements; and 5) winning together by empowering our team members with the tools and culture they need to succeed. Combined, our strategy has not only improved our underlying traffic momentum and share gains relative to the industry during the first quarter, but also allowed us to better speak to our guests on what matters to them through the continued evolution of our targeted marketing initiatives. We believe we have the right team to make Red Robin a place that guests choose first, team members are proud to work at, and shareholders can rely on for sustainable returns. With that, we are happy to take your questions. Operator, please open the lines.
分析師問答
Thank you. We will now be conducting a question-and-answer session. You may press 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, while we poll for a question. Our first question comes from the line of Alexander Russell Slagle with Jefferies. Please proceed with your question.
Hey, thanks. Good afternoon, everyone, and congrats, Mark, and good to have you back. And, Christopher, it was certainly great having you back for a while as well. I wanted to just dive more into the acceleration in the same-store sales and traffic trends and I mean, it seems like the new menu, Big Yummm deals were pretty big and maybe a little bit also from the targeted marketing efforts. But it just seems like the trend accelerated a bit more notably after the storms than I think we would have expected. So if you could dig more into the Big Yummm performance and maybe some of the other metrics, like the check performance certainly seemed pretty solid.
Yeah. Hey, Alexander. This is David. I will start out and then I will hand it over to Mark and Christopher. I think you are right. We did see strength coming into the year. We saw a little bit of a dip through the weather that everybody saw in the middle of the quarter, and then a nice rebound at the end. It was a combination of Big Yummm and certainly the new menu launch that we put out, which performed as we had hoped or better than we had hoped across a number of different measures. So we feel good about the quarter, and I think you are right: strong start, kind of a choppy middle, and then a strong finish. Mark or Christopher, do you want to jump on that?
Yeah. The only thing I would add, this is Christopher, is that from a marketing perspective, we did increase our spend year over year. We feel really good about that targeted marketing approach. We said on the last call we expect to spend more in marketing dollars pretty much every quarter of this year than we spent a year ago, and I think that we are going to continue on that track certainly in the second quarter.
Okay. And, you know, on the cost, the labor efficiency was pretty impressive just given last year. I know there were some acceleration or a benefit that you started to see from the managing partner program and efficiency on that labor line, but are we starting to level out? Are turnover levels sort of down and stabilizing or do you think there is more room to go on labor?
First of all, hats off to the operations team. They did a remarkable job tightening their belts and managing labor much more effectively than we had in the past, and they deserve a lot of the credit for this. We have brought labor down, and we are going to get to a point where there are not the same kinds of gains that we have been seeing, but we will continue to work toward that efficiency. We talk about that every day. I think the thing that is our governor right now is making sure the guest satisfaction scores remain strong. As long as we do not think we are impacting the guests, we will keep trying to find ways to be more efficient. But I would say we are approaching, at least for us right now, an optimal level.
And, tactically speaking, if you think about how that manifests in the P&L, we started seeing those benefits in Q2 of last year from a savings perspective. So we are going to start lapping that when we get to Q2 of this year.
Alright. Thanks. Congrats.
Thank you. Our next question comes from the line of Jeremy Hamblin with Craig Hallum. Please proceed with your question.
Thanks, and congrats on the results. Just wanted to follow up on the last question in terms of seeing that the cadence exiting the quarter was building—have you seen some of that momentum continue here in Q2? And, in terms of check and menu pricing, you are at just over 3% price in Q1. How do you think about price as it plays out through the rest of 2026?
In terms of trends as we came out of Q1, Q2 is looking positive so far, but it is early days. I will let Mark address the pricing cadence for the rest of the year.
We are still in that 3% to 3.5% range, so that has been pretty consistent. We had very little rollover from last year.
And then in terms of additional menu item initiatives, and how you are thinking about menu innovation in combination with some of the marketing efforts—clearly in casual dining, capturing traffic in combination with marketing is important. You leaned in a bit more on marketing, with a $4 million year-over-year increase in marketing spend in Q1. Social and digital marketing has been key to driving traffic. Given the success of the value platform and the mix, do you lean into value more, or how should we think about the interplay of those two things?
You hit the key point: it is an interplay. We are going to continue to innovate. The consumer is obviously interested in value messaging and value offerings across the category these days, but that does not mean we will stop innovating with new products. We put a new menu out in January, which had both value and higher-end products in the package. We came out with the slider tower offering, which was another opportunity to innovate and introduce new products. We are continuing to look at what the next round of the value platform looks like as we go forward. So all of those things are happening. I do not think it will be one or the other. We will constantly be asking what the value hook is and what other product offerings we can add to the menu or introduce as limited-time offers.
Understood. Last one for me: in terms of units, did you have any store closures in Q1? I think you said you were looking at about maybe 20 for the year. Just wanted to understand what you did in Q1, how we should think about the cadence for 2026, and what the expected impact might be on revenues and EBITDA.
Yes. I will let Mark or Christopher talk about the impact to EBITDA, but we had six closures in Q1. That will kind of play out relatively equally across quarters for the balance of the year.
On the sales front, if you combine last year's closures with the expectation for this year, it's close to $40 million from the sales perspective. It's kind of a mixed bag on the restaurant-level operating profit side, which will be pretty neutral from that perspective.
Jeremy, to clarify, I said it is going to play out similar to Q1 where there were six closures in Q1, but for the full year 2026, the closures will be spread relatively equally over the next three quarters.
Understood. Thanks for the color and best wishes.
Thank you. Our next question comes from the line of Mark Smith with Lake Street Capital. Please proceed with your question.
Hi, guys. I wanted to ask about commodities a little bit. Sounds like you said you are about 60% locked right now through the end of the year. Maybe walk us through opportunities to continue locking stuff and especially as we look at beef—where you are at, what is on contract, and when things come up—and what we might look for in terms of potential inflation this year.
From an overall perspective we are still in that kind of 3.5% range for commodity inflation expectations. Beef is a very large piece and we do not lock that piece, so that is really what is floating. Dairy is another one that is often floating. Chicken and some of the other commodities are areas where we continue to pursue locking opportunities.
Okay. And then similarly back to labor efficiencies, you talked about this a little bit. Any additional thoughts as we think about leverage from higher sales that helped with some of those efficiencies versus some of the initiatives you put in such as using AI to manage labor—what are the puts and takes within labor that help you get some of these efficiencies?
It's a combination of things. We introduced handheld technology which improves efficiencies at the restaurant level. The AI tools, for those who have adopted them, have really helped by highlighting opportunities for managing partners. We are trying to extend the comfort level with those tools across the system. Similarly, managing inventory and food costs in the restaurants and improving planning have helped. We've been pleased with what we have seen on that front. We continue to tighten labor metrics and targets for the operating team, and they keep hitting them. I give them credit for their approach, but I also want to be conscious of the guest impact. I don't want us to go so far that it negatively impacts the guest experience, so we are being careful in how we monitor that.
Perfect. The last one for me: I think last quarter you quantified a bit around Big Yummm mix within dine-in. Are you able to do that now? Anything you can say or quantify around how Big Yummm trended and mixed during the quarter?
At a headline level, we modeled what we thought Big Yummm might do when we put the new menu in place, and the performance since launch has been within our targets. I'll turn it over to Christopher and Mark for the more detailed metrics.
Prior to when we put the additional offerings on the core menu, the core limited-time offer at $9.99 was mixing in the 8% to 9% range. We put the three price points on the core menu—$9.99, $14.99, and $16.99—and we saw that mix jump up. It's been hovering in that 13% to 14% range pretty much since the new menu launched in late January. I would not expect it to move much from here; I think it will stay pretty much in this range moving forward, which we are totally fine with. We feel really good about where it is. It's mixing at the right level. As we introduce new innovation, it will create opportunities for us to have barbell price points across the menu, so it is really a perfect strategy for us. We feel really good about how it is playing out.
Excellent. Thank you.
Thank you. And we have reached the end of the question-and-answer session. I would like to turn the floor back to David A. Pace for closing remarks.
Just to wrap up, thanks to everybody for joining. We feel really good about the quarter, and we feel like the First Choice plan is working. We are going to keep on it, and we look forward to talking to you again after Q2.
Thank you. This concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.