GREENWOOD VILLAGE Colo. Red Robin Gourmet Burgers Inc. said its third-quarter profit rose 36.4 percent from a year ago thanks to a 27-percent surge in revenue from higher check averages and stronger customer traffic that the company said was spurred on by its national television and internet media campaigns.
Net income for the operator or franchisor of about 380 casual-dining restaurants totaled $8.2 million, or 49 cents per share, for the quarter ended Oct. 7, compared with $6 million, or 36 cents per share, for the year-ago quarter. Latest-quarter corporate revenue rose to $188.7 million from $148.6 million. Same-store sales at corporate restaurants increased 4.8 percent.
“Our comparable restaurant sales and traffic trends reached their highest levels in more than 18 months, which we believe is impressive considering the current state of the casual-dining industry,” said Dennis Mullen, chairman and chief executive.
Red Robin said it planned to spend as much as $11.5 million this year for the chain’s first national advertising campaign, which is being funded by contributions of 1 percent of sales at both corporate and franchised restaurants.
Despite the strong quarter, Red Robin said it would post a dip in profit for its current fiscal year mainly because of charges for the company’s settlement of a California wage and hour lawsuit and for the company’s stock compensation expenses. Earnings per share are expected to be between $1.70 and $1.74, the company said, slightly under last year’s $1.75 per-share profit.