Red Robin Gourmet Burgers Inc. expects same-store sales to decrease 3.6 percent in the third quarter ended Oct. 2, the company said Thursday in a preliminary earnings release.
Red Robin expects a loss of $3 million in the quarter, or 23 cents per share. But, when adjusted to exclude costs related to the closure of restaurants, it expects a profit of $5.1 million, or 38 cents per share.
“We are making real progress in improving guest traffic and service, fueled by investments in select initiatives focused on guest engagement, technology and operational efficiencies,” Red Robin CEO Denny Marie Post said in a statement.
Red Robin traffic outperformed industry benchmarks in the quarter, but the company has sacrificed profits and was hurt by “weakening industry trends.”
“Our investment in regaining our edge on everyday value has come at a cost to profits, further undermined by weakening industry trends,” Post said.
Red Robin said it would make improvements to its business, and has identified a way to strengthen earnings performance, she noted.
As a result of the quarterly performance, Red Robin lowered expectations for earnings before interest, taxes, depreciation and amortization, or EBITDA, to $141 million, from $145 million.
The results come two months after Red Robin named Post CEO, succeeding Steve Carley, who retired after six years at the operator.
Red Robin stock is down 30 percent year to date.