Red Robin Gourmet Burgers, Inc. Q2 FY2025 earnings call

• Launched 'First Choice' Plan with pillars: Hold Serve (maintain labor efficiency, guest satisfaction), Drive Traffic (Big Yummm deal launched, data-driven marketing to roll out in Q3), Find Money (EBITDA exceeded expectations, G&A savings, refranchising interest), Fix Restaurants (invest in deferred maintenance, pilot refreshes), Win Together (provide tools for team members).

Total revenues in Q2 2025 were $283.7 million, down from $300.2 million in Q2 2024. Comparable restaurant revenue decreased 3.2% (4.4% increase in net menu price offset by 5.5% guest traffic decline). Restaurant-level operating profit margin was 14.5%, up 270 basis points y-o-y, driven by labor efficiency. G&A costs were $17.4 million vs. $16.6 million in Q2 2024. Selling expenses were $6.4 million vs. $12 million in Q2 2024. Adjusted EBITDA was $22.4 million, up $8.8 million y-o-y. Cash/cash equivalents were $24.4 million, restricted cash $9.2 million, borrowing capacity $37.5 million. Debt reduced to $169 million, net-debt to adjusted EBITDA ratio ~2x.

• Total revenue expected ~$1.2 billion (down from prior $1.21-$1.23 billion), comparable restaurant sales decline 3%-4% remainder of year. - Restaurant-level operating profit 12%-13%, adjusted EBITDA $60-65 million. - Capital expenditures ~$30 million (higher end of prior guidance). - Big Yummm promotion: ~9% of guests choosing it, expected to drive future traffic/sales/profitability. - Selling expenses ~$32 million, G&A expense ~$80 million (down from prior ~$87 million), G&A favorability offset by commodity costs.

• Dependence on successful 'First Choice' Plan execution. - Impact of competitive promotions on traffic/sales. - Commodity cost increases (ground beef, poultry) affecting profitability. - Uncertainty around refranchising process/timing.

Q: Congrats on strong results. Talk about labor efficiency journey and Big Yummm impact on restaurant level margin.

A: Operators continue improving labor management without compromising guest experience. Big Yummm expected to have ~1% drag on restaurant level profitability in remainder of year, ~half from labor.

Q: Actions to further step up guest experience.

A: Holistic approach including facility investments, technology improvements, traffic-driving initiatives.

Q: Franchisee health and sales levels.

A: Franchisees are participating in promotions, generally good operators, company team closing gap to their performance.

Q: Debt reduction and refinancing.

A: No specific net-debt target yet, aiming to refinance by Q1 2026 to improve financing terms.

Q: Franchisee sales and promotion participation.

A: Franchisees are buying in, participating in promotions, supportive of changes.

Q: Menu pricing and commodity impact.

A: Menu price expected to roll off, commodity costs adding headwinds affecting cost of goods.