Sit-Down Dining Stocks Q2 Teardown: Red Robin (NASDAQ:RRGB) Vs The Rest
Let’s dig into the relative performance of Red Robin (NASDAQ:RRGB) and its peers as we unravel the now-completed Q2 sit-down dining earnings season.
Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.
The 13 sit-down dining stocks we track reported a slower Q2. As a group, revenues were in line with analysts’ consensus estimates.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
In light of this news, sit-down dining stocks have held steady with share prices up 1.5% on average since the latest earnings results.
Red Robin (NASDAQ:RRGB)
Known for its bottomless steak fries, Red Robin (NASDAQ:RRGB) is a chain of casual restaurants specializing in burgers and general American fare.
Red Robin reported revenues of $300.2 million, flat year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was a strong quarter for the company with full-year revenue guidance topping analysts’ expectations.
G.J. Hart, Red Robin's President and Chief Executive Officer said, "Our results for the second quarter and our reduced guidance for the year are not what we expected when we last communicated in May, with the slowdown experienced in the broader restaurant industry masking the substantial progress we continue to make against our North Star plan."
Unsurprisingly, the stock is down 2.1% since reporting and currently trades at $4.64.
Is now the time to buy Red Robin? Access our full analysis of the earnings results here, it’s free.
Best Q2: BJ's (NASDAQ:BJRI)
Founded in 1978 in California, BJ’s Restaurants (NASDAQ:BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.
BJ's reported revenues of $349.9 million, flat year on year, in line with analysts’ expectations. The business had a very strong quarter with a solid beat of analysts’ earnings estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 11.7% since reporting. It currently trades at $32.87.
Is now the time to buy BJ's? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Denny's (NASDAQ:DENN)
Open around the clock, Denny’s (NASDAQ:DENN) is a chain of diner restaurants serving breakfast and traditional American fare.
Denny's reported revenues of $115.9 million, flat year on year, falling short of analysts’ expectations by 2.6%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 16.4% since the results and currently trades at $6.41.
Read our full analysis of Denny’s results here.
Darden (NYSE:DRI)
Started in 1968 as the famous seafood joint, Red Lobster, Darden (NYSE:DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.
Darden reported revenues of $2.76 billion, flat year on year. This result came in 1.5% below analysts' expectations. Overall, it was a slower quarter as it also produced a miss of analysts’ earnings estimates and underwhelming earnings guidance for the full year.
The stock is up 1.6% since reporting and currently trades at $161.66.
Read our full, actionable report on Darden here, it’s free.
Brinker International (NYSE:EAT)
Founded by Norman Brinker in Dallas, Texas, Brinker International (NYSE:EAT) is a casual restaurant chain that operates under the Chili’s, Maggiano’s Little Italy, and It’s Just Wings banners.
Brinker International reported revenues of $1.21 billion, up 12.3% year on year. This number topped analysts’ expectations by 3.8%. Aside from that, it was a mixed quarter as it also recorded full-year revenue guidance beating analysts’ expectations but underwhelming earnings guidance for the full year.
Brinker International delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is up 13.5% since reporting and currently trades at $79.81.
Read our full, actionable report on Brinker International here, it’s free.
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