Red Robin (NASDAQ:RRGB) Surprises With Q2 Sales, Stock Soars

August 13, 2025 at 16:30 PM EDT

RRGB Cover Image

Burger restaurant chain Red Robin (NASDAQ: RRGB) reported Q2 CY2025 results beating Wall Street’s revenue expectations, but sales fell by 5.5% year on year to $283.7 million. On the other hand, the company’s full-year revenue guidance of $1.2 billion at the midpoint came in 1% below analysts’ estimates. Its non-GAAP profit of $0.26 per share was significantly above analysts’ consensus estimates.

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Red Robin (RRGB) Q2 CY2025 Highlights:

Revenue: $283.7 million vs analyst estimates of $279.6 million (5.5% year-on-year decline, 1.5% beat)
Adjusted EPS: $0.26 vs analyst estimates of -$0.06 (significant beat)
Adjusted EBITDA: $22.4 million vs analyst estimates of $17.99 million (7.9% margin, 24.5% beat)
The company dropped its revenue guidance for the full year to $1.2 billion at the midpoint from $1.22 billion, a 1.6% decrease
EBITDA guidance for the full year is $62.5 million at the midpoint, below analyst estimates of $64.72 million
Operating Margin: 3.5%, up from -1.5% in the same quarter last year
Same-Store Sales fell 3.2% year on year (-0.8% in the same quarter last year)
Market Capitalization: $109.3 million

Dave Pace, Red Robin's President and Chief Executive Officer said, "We have begun executing on the strategic elements of our First Choice plan and are already seeing encouraging results. Since launching our Big YUMMM Burger Deal in July, we have seen meaningful improvement in traffic compared to our second quarter exit rate. This value-driven offering, combined with our upcoming First Choice marketing launch represents the foundation of our multi-layered approach to sustainable traffic growth."

Company Overview

Known for its bottomless steak fries, Red Robin (NASDAQ: RRGB) is a chain of casual restaurants specializing in burgers and general American fare.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $1.24 billion in revenue over the past 12 months, Red Robin is a mid-sized restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.

As you can see below, Red Robin’s revenue declined by 1.1% per year over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as it closed restaurants and observed lower sales at existing, established dining locations. Red Robin Quarterly Revenue

This quarter, Red Robin’s revenue fell by 5.5% year on year to $283.7 million but beat Wall Street’s estimates by 1.5%.

Looking ahead, sell-side analysts expect revenue to decline by 3.6% over the next 12 months, a slight deceleration versus the last six years. This projection is underwhelming and implies its menu offerings will face some demand challenges.

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Restaurant Performance

Number of Restaurants

Over the last two years, Red Robin has generally closed its restaurants, averaging 1.8% annual declines.

When a chain shutters restaurants, it usually means demand for its meals is waning, and it is responding by closing underperforming locations to improve profitability.

Note that Red Robin reports its restaurant count intermittently, so some data points are missing in the chart below.

Same-Store Sales

The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales is an industry measure of whether revenue is growing at those existing restaurants and is driven by customer visits (often called traffic) and the average spending per customer (ticket).

Red Robin’s demand has been shrinking over the last two years as its same-store sales have averaged 1.2% annual declines. This performance isn’t ideal, and Red Robin is attempting to boost same-store sales by closing restaurants (fewer locations sometimes lead to higher same-store sales).

In the latest quarter, Red Robin’s same-store sales fell by 3.2% year on year. This decrease represents a further deceleration from its historical levels. We hope the business can get back on track.

Key Takeaways from Red Robin’s Q2 Results

It was good to see Red Robin beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. On the other hand, its full-year EBITDA guidance missed and its full-year revenue guidance fell slightly short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 5.5% to $6.31 immediately after reporting.

Indeed, Red Robin had a rock-solid quarterly earnings result, but is this stock a good investment here? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.

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