Red Robin Gourmet Burgers Inc. has more than doubled its off-premise sales in the past two weeks of the coronavirus pandemic, offsetting some of the losses from dine-in closures, the company said Wednesday.
The Greenwood Village, Colo.-based casual-dining, in a business update, said that to deal with the “escalating” COVID-19 pandemic it also had drawn down on the remaining capacity in its $300 million credit facility, “bringing Red Robin’s cash balance to more than $91 million” as of March 29.
“We are navigating an unprecedented time for our business, industry and country as we collectively work to combat the global COVID-19 crisis,” said Paul J.B. Murphy III, Red Robin’s president CEO, in a statement.
Murphy said Red Robin had shifted restaurants to a model based on to-go, delivery and catering while adhering to Centers for Disease Control and Prevention guidelines and state and city restrictions aimed at stemming the spread of the virus.
“We are encouraged by our continuing off-premise sales momentum, which has more than doubled over the past two weeks compared to our trends before the impact of COVID-19,” Murphy said.
“This will help mitigate the decline in comparable restaurant revenues due to the closure of dine-in services at substantially all Red Robin-operated restaurants,” he said, “and enable us to focus on optimizing the execution of our off-premise channels both during and following the crisis.”
Murphy said the company had implemented enhanced health and safety protocols across the business, emergency sick pay for hourly team members and telecommuting policies for nearly all corporate level employees.
The company said it had also reduced executive base salaries by 20%, effective March 30, and reduced board member cash retainer fees by the same amount.
Red Robin said it was marketing its off-premise platforms primarily through digital channels and was “postponing or eliminating all non-essential spending, including capital expenditures for previously planned growth and other projects.” Those non-essential spending categories included the company’s continued rollout of Donato’s, restaurant refreshes and information technology projects.
The company also withdrew its 2020 financial guidance. The company’s current fiscal first quarter ends on April 19.
For the fourth quarter ended Dec. 29, Red Robin’s net loss narrowed to $7.7 million, or 60 cents per share, compared to a $10.6 million, or 82 cents per share, in the prior-year period. Revenue declined 1.2% to $302.9 million
“We are confident the actions we are taking will ultimately provide us ample liquidity and allow Red Robin to emerge in an even stronger position when the recovery begins,” Murphy said.
Red Robin, founded in 1969, has more than 550 owned and franchised restaurants in the United States and Canada.
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