Red Robin Gourmet Burgers 3Q profit top estimates

GREENWOOD VILLAGE, Colo. - Casual dining chain Red Robin Gourmet Burgers Inc. reported Thursday that its third-quarter profit fell more than 24 percent as higher costs offset a double-digit increase in sales, but adjusted results topped Wall Street expectations.

However, the weakening economy is expected to weigh on the company's results going forward. Red Robin trimmed its outlook for the full year, citing consumers' increased pullback on discretionary spending.

For the three months ended Oct. 5, the company earned $6.2 million, or 40 cents a share, compared with $8.2 million, or 49 cents a share, in the same period a year ago. Excluding asset impairment charges, the company earned 45 cents per share in the latest period.

Revenue increased more than 10 percent to $208.6 million from $188.7 million a year ago, although sales at company-owned stores open at least a year decreased 2.2 percent.

Analysts surveyed by Thomson Reuters, who generally exclude one-time items from their estimates, were expecting earnings of 37 cents a share on slightly higher revenue of $211 million.

"The third quarter of 2008 was unusually challenging for Red Robin and for the casual dining industry as a whole," said Chairman and Chief Executive Dennis B. Mullen. "The shock effect of the financial crisis in the capital markets intensified pressure on consumers who were already feeling the pressure of higher energy, food and other costs."

Year-to-date, the company reported earnings of $21.3 million, or $1.31 a share, compared with profit of $20.6 million, or $1.22 a share, in the same period a year ago. Revenue rose to $670.6 million from $579.6 million.

The chain opened 13 new Red Robin restaurants in the third quarter. As of the end of the third quarter, there were a total of 417 Red Robin restaurants in North America.

Going forward, the company projects fiscal 2008 earnings per share of $1.65 to $1.75 on revenue of $868 million to $873 million. Same-store sales are projected to decline roughly 0.5 percent to 1 percent. The guidance includes 7 cents per share worth of acquisition and asset impairment costs.

The forecast falls well below analysts' average estimates of $1.91 a share on revenue of $885.9 million. Analysts generally exclude one-time items from their estimates.

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