Red Robin Gourmet Burgers (RRGB) – Bear of the Day
Source: http://www.zacks.com/commentary/11345/Red+Robin+Gourmet+Burgers+%28RRGB%29+-+Bear+of+the+DayPosted on Monday, June 29th, 2009 | In Market Commentary, Stocks to Watch
Contributed by: Zacks Market Commentaries (http://www.zacks.com/) -
We believe shares of Red Robin Gourmet Burgers (RRGB) will continue to underperform both the larger market and the restaurant
industry.
Red Robin’s traffic began declining long before the onset of rising gas prices in October 2007,
which began choking business in the casual dining sector — a victim of poor site selection in new markets. In spite of their poor performance, the company has retained and even added to these sites as it repurchased 45 franchises since 2005.
Moreover, 2009 consensus EPS estimates are 10% higher than ours, and we think our estimate may prove aggressive if the economic slowdown is deeper or more protracted than we currently anticipate.Zacks Investment Research
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