RED ROBIN GOURMET BURGERS INC Q4 FY2024 earnings call

• In 2024, dine-in guest satisfaction scores increased ~8 percentage points vs 2023, beating casual dining average. Satisfaction scores from SMG and Technomic were at highest since 2017.
• Launched revamped Red Robin Royalty program, adding ~1.5 million members in 2024 to end with ~14.9 million members. Loyalty transactions increased 13% since launch.
• In 2024, rolled out appointment dining promotions to drive incremental traffic, upsell, and dine-in traffic. Launched Managing Partner Compensation Program aligning operators with growth goals.
• Fourth quarter saw 3.4% comparable restaurant revenue increase and 19% adjusted EBITDA increase to $12.7 million.
• 2025 priorities: further improve traffic trends; gain efficiency in operations for profitability. Focus on loyalty program personalization, menu innovation (e.g., Hot Honey platform launch), maintaining value promotions, and interim marketing leadership with Kathleen Bush and Dave Dodson.

In the fourth quarter, total revenues were $285.2 million compared to $309 million in the fourth quarter of 2023. Comparable restaurant revenue increased by 3.4% excluding the impact of a change in deferred loyalty revenue. Adjusted EBITDA was $12.7 million in the fourth quarter of 2024, an increase of $2 million versus the fourth quarter of 2023. Restaurant level operating profit as a percentage of restaurant revenue was 11.5%, a decrease of 70 basis points compared to the fourth quarter of 2023.

• Total revenue expected to be between $1.225 billion and $1.25 billion, incorporating modestly positive same-store sales and ~2% revenue headwind from restaurant closures.
• Restaurant level operating profit expected to be 12% to 13%, representing an increase of 120 to 220 basis points from 2024.
• Adjusted EBITDA excluding non-cash stock-based compensation expected to be $60 million to $65 million.
• Capital expenditures expected to be $25 million to $30 million.

Q: Alex Slagle asked about the balance between driving frequency with promotions/loyalty efforts and improving margins, including pricing. G.J. Hart responded on pricing being ~1% in 2025 and labor efficiency gains. Todd Wilson discussed discounts increasing in Q1/Q2 2025 but normalizing later, and mix impact on menu with add-on items holding up.

Q: Jeremy Hamblin inquired about quarter-to-date trends and takeout initiatives. Todd Wilson mentioned Q1 started well with momentum, and third-party sales are ~15% of total sales, with plans to optimize through digital initiatives. G.J. Hart talked about comprehensive marketing programs including local store and digital efforts in test markets.

Q: Andrew Wolf asked about Loyalty 2.0 transaction increase breakdown and free cash flow. G.J. Hart said 25% of visits from new users and 20% from lapsed users, and Todd Wilson explained free cash flow expectations from operations funding CapEx.

Q: Mark Smith asked about store closings timing and commodities. G.J. Hart said 10-15 closings expected, with three asset sales in Q1, and Todd Wilson discussed commodity inflation at ~3% and pricing expectations for 2025.

Q: Todd Brooks asked about the Hot Honey platform and customer segments. G.J. Hart said Hot Honey platform is a new launch with positive testing, and satisfaction scores across value metrics have improved, with no significant variability by income cohort observed.