Red Robin Gourmet Burgers, Inc. · NASDAQ:RRGB
Red Robin Gourmet Burgers — Q3 2018 Earnings Presentation
28 slides from Red Robin Gourmet Burgers's earnings presentation, Nov 6, 2018
Slide 1: Third Quarter 2018 Results
Third Quarter 2018 Results November 6, 2018 CLASSIFIED – INTERNAL USE ONLY
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-looking statements in this presentation regarding the Company’s future performance, restaurant sales and guest traffic, earnings per share, new restaurant openings, and all other statements that are not historical facts, are made under the safe harbor provisions of
Slide 3: Red Robin Q3-2018 Results
Red Robin Q3-2018 Results • Total revenues decreased 3.5% • Off-premise sales increased to 10.1% of total food and beverage sales • Comparable restaurant revenue decreased 3.4% (using constant currency rates) • Comparable restaurant guest counts decreased 1.9% • Restaurant labor costs as a percentag
Slide 4: Continued Off-Premise Sales Growth
Continued Off-Premise Sales Growth US Comp Locations Off-Premise Sales as a % of Gross F&B Sales 12.0% 10.1% 10.0% 9.4% 9.6% 8.3% 8.0% 7.6% 7.0% 6.3% 5.7% 6.0% 5.4% 4.0% 2.0% 0.0% Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18
Slide 5: Traffic Performance vs. Competitors
Traffic Performance vs. Competitors 5.0% 4.0% 4.0% 3.6% 3.6% 3.0% 2.2% 2.3% 2.0% 1.6% 1.2% 1.2% 1.0% -1.5% 0.0% -0.6% -1.0% -0.9% -2.0% Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 10/7/2018
Slide 6: Two Year Traffic Outperformance vs. Competition
Two Year Traffic Outperformance vs. Competition 7.0% 6.0% 5.8% 5.2% 5.2% 5.0% 4.0% 3.5% 3.0% 3.0% 2.5% 2.0% 1.0% 0.3% 0.0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Source: Based on Black Box Intelligence Casual Dining (All Cuisine) peers as of 10/7/2018
Slide 7: Recapturing Red Robin Service Standards
Recapturing Red Robin Service Standards • Increased in-restaurant training to provide faster seating and service • Strengthened To-Go capabilities, especially during peak times • Focused on delivering great dine-in and off-premise service
Slide 8: Strong Relative Value Story
Strong Relative Value Story
Slide 9: More Appealing Menu Offers and Value
More Appealing Menu Offers and Value
Slide 10: Oktoberfest Burger Fan Celebration
Oktoberfest Burger Fan Celebration Daily Breeze Staff Photos
Slide 11: Holiday Season Menu Features
Holiday Season Menu Features
Slide 12: What Red Robin is Known For
What Red Robin is Known For • Craveable, Customizable Gourmet Burgers • Great Service at Appropriate Speed • Affordable Abundance
Slide 13: Financial Update
Financial Update
Slide 14: Q3-18 Sales Highlights
Q3-18 Sales Highlights Q3-18 Q3-17 Q3-18 YTD Q3-17 YTD Change Change (12 Weeks) (12 Weeks) (40 Weeks) (40 Weeks) Restaurant revenue $290.2 million $301.1 million -3.6% $1.02 billion $1.03 billion -1.1% Total company revenues $294.9 million $305.7 million -3.5% $1.03 billion $1.04 billion -1.1% Compa
Slide 15: Comparable Restaurant Revenue Trend
Comparable Restaurant Revenue Trend(1) 5.0% 3.0% 2.7% 1.0% 0.5% -0.1% -1.0% -0.9% -1.2% -3.0% -2.6% -2.6% -3.2% -3.4% -3.6% -4.3% -5.0% Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 (1) Calculated at constant currency rates
Slide 16: Restaurant Level Operating Profit Margins
(1)(2) Restaurant Level Operating Profit Margins 25.0% 24.0% 23.0% 22.8% 22.0% 21.3% 21.4% 21.0% 20.8% 20.5% 20.0% 20.0% 19.8% 19.3% 19.1% 19.0% 18.6% 18.0% 17.0% 16.8% 16.0% Q1 Q2 Q3 Q4 2016 2017 2018 (1) See Appendix for reconciliation of non-GAAP restaurant-level operating profit to net income (l
Slide 17: Q3-18 Restaurant Results
Q3-18 Restaurant Results % of Restaurant % of Restaurant Revenue Revenue Favorable Q3-18 Q3-17 (Unfavorable) Cost of sales 23.8% 23.8% - Labor 35.3% 35.3% - Other operating 15.0% 13.8% (120 bps) Occupancy 9.2% 8.6% (60 bps) Restaurant Level Operating Profit(1) 16.8% 18.6% (180 bps) (1) See Appendix
Slide 18: Significant Productivity Improvement
Significant Productivity Improvement US Comp Locations Labor Productivity Improvement Year over Year 14.0% 11.8% 12.0% 10.9% 10.0% 8.0% 8.0% 6.3% 6.0% 4.0% 2.4% 2.0% 1.6% 0.0% -0.8% -2.0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18
Slide 19: Adjusted EBITDA
Adjusted EBITDA(1) $55.0 $50.0 $48.9 $45.8 $45.0 $42.4 $40.0 $35.8 $35.0 $33.5 $32.3 $30.0 $28.8 $29.2 $26.8 $25.5 $25.0 $24.2 $20.0 $15.0 $10.0 Q1 Q2 Q3 Q4 2016 2017 2018 (1) See Appendix for reconciliation of non-GAAP Adjusted EBITDA to Net Income (Loss)
Slide 20: Adjusted Earnings Per Diluted Share
Adjusted Earnings Per Diluted Share $1.40 $1.27 $1.20 $1.00 $0.89 $0.80 $0.75 $0.78 $0.69 $0.61 $0.60 $0.46 $0.38 $0.40 $0.35 $0.21 $0.20 $0.16 $0.00 Q1 Q2 Q3 Q4 2016 2017 2018 See Appendix for reconciliation of non-GAAP Adjusted Earnings Per Diluted Share to Earnings (Loss) Per Diluted Share
Slide 21: In Closing
In Closing
Slide 22: Appendix
Appendix
Slide 23: Adjusted Net Income
Adjusted Net Income(1) ($ in Millions) $20.0 $18.0 $17.6 $16.0 $14.0 $12.0 $11.6 $10.3 $10.2 $10.0 $9.1 $7.9 $8.0 $6.0 $6.0 $5.0 $4.5 $4.0 $2.7 $2.1 $2.0 $0.0 Q1 Q2 Q3 Q4 2016 2017 2018 (1) See Appendix for reconciliation of non-GAAP Adjusted Net Income to Net Income (Loss)
Slide 24: Cash Flow from Operations
Cash Flow from Operations ($ in Millions) $80.0 $70.0 $70.0 $60.0 $57.0 $50.0 $42.5 $40.0 $34.7 $35.0 $30.0 $27.6 $24.6 $20.0 $20.0 $16.9 $11.8 $10.0 $4.3 $0.0 Q1 Q2 Q3 Q4 2016 2017 2018
Slide 25: Q3-18 Commodity Update
Q3-18 Commodity Update % of Total COGS in Market vs. Contract Q3-18 Steak fries 13.7% 100% contracted through 10/19 Ground beef 12.8% Market Poultry 9.9% 100% contracted though 1/19 Produce 7.8% 70% contracted through 10/19 Bacon 100% contracted through 11/18; Meat 7.0% Prime rib 100% contracted thr
Slide 26: Reconciliation of Adjusted Net Income to Net Income (Loss) and Adjusted EPS
Reconciliation of Adjusted Net Income to Net Income (Loss) and Adjusted Earnings Per Diluted Share to Earnings (Loss) Per Diluted Share ($ in thousands, except per share data) 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net income (loss) as reported $ 14,225 $ 7,552 $ (1,300) $ (8,752) $ 11,567
Slide 27: Restaurant Level Operating Profit Reconciliation
Restaurant Level Operating Profit Reconciliation to Income from Operations and Net Income (Loss) ($ in thousands) 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Restaurant revenue $ 396,770 $ 302,117 $ 293,858 $ 287,924 $ 413,451 $ 312,351 $ 301,100 $ 338,154 $ 414,702 $ 310,392 $290,218 Restaurant
Slide 28: EBITDA and Adjusted EBITDA Reconciliation to Net Income (Loss)
EBITDA and Adjusted EBITDA Reconciliation to Net Income (Loss) ($ in thousands) 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Net income (loss) as reported $ 14,225 $ 7,552 $ (1,300) $ (8,752) $ 11,567 $ 6,931 $ 2,714 $ 8,807 $ 4,380 $ (1,874) $ 1,709 Adjustments to net income (loss): Income tax e
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