Red Robin Gourmet Burgers (NASDAQ:RRGB) executives said fourth-quarter results showed “steady momentum” under the company’s First Choice plan, while acknowledging softer industry trends in October and November and weather-related disruption early in 2026.
Sales trends: December inflection after a softer quarter
President and CEO Dave Pace said comparable sales for full-year 2025 were down 0.3% excluding deferred loyalty revenue, driven by a 3.5% increase in average check offset by a 3.8% decline in traffic. He said traffic improved in the back half of the year as the company “rolled off 2024 pricing actions” and gained traction with its Big YUMMM value offering.
Momentum continued into January, he said, before results became “choppy” due to weather events beginning in late January, including Winter Storm Fern.
Profitability: Labor efficiency and G&A reductions
Chief Financial Officer Chris (last name not provided in the transcript) reported fourth-quarter total revenues of $269 million, down $16.2 million from the prior year, primarily due to lower comparable sales and the impact of restaurant closures. Restaurant-level operating margin was 11.4%, down 10 basis points year over year, as cost savings, closures, and higher check average were offset by inflation and lower traffic.
Adjusted EBITDA in the fourth quarter was $11.8 million, down $2.6 million from the prior-year quarter but ahead of management’s expectations. For full-year 2025, adjusted EBITDA totaled $69.7 million, which management said represented 53% growth over 2024, while restaurant-level operating profit (RLOP) margin increased by 190 basis points. Pace emphasized that the company achieved the improvement with “only modest pricing,” noting net pricing contributed 1.6% in the fourth quarter.
Management highlighted labor efficiency as a key driver. Pace said labor initiatives contributed about 180 basis points to restaurant-level margin in the fourth quarter and drove a 250 basis point reduction in total labor costs for 2025, while guest satisfaction scores were maintained. He also pointed to the managing partner model, which rewards partners for restaurant-level profitability improvements.
On corporate costs, the CFO said fourth-quarter general and administrative expenses were $14.9 million, down from $18.4 million a year earlier, citing reduced people costs from corporate efficiency initiatives and lower stock-based compensation. Pace said that excluding stock-based compensation, the company reduced G&A by over $4 million in 2025 and expects a similar step down in 2026. In Q&A, the CFO added that excluding stock-based comp, G&A ended 2025 at $71 million and is expected to be in the $65 million to $67 million range in 2026.
Selling expenses rose to $8.8 million in the fourth quarter from $5.7 million a year earlier. In Q&A, management said it expects selling expense to increase in 2026 versus 2025, potentially up in each quarter, given marketing initiatives and recent performance.
Menu and marketing: Expanding Big YUMMM and micro-targeting
Pace said Red Robin’s Big YUMMM value offer continued to resonate, reaching 10% guest mix within the dine-in channel in the fourth quarter. He said the company expanded the platform with a new menu launched January 26 that integrates Big YUMMM deals into the core menu, offering six meal options priced from $9.99 to $16.99 and expanding beyond burgers into items such as hand-breaded crispy chicken sandwiches, Donatos Pizza, and Whiskey River BBQ wraps. Each meal includes bottomless sides and beverages, management said.
Pace described the updated menu strategy as a “barbell approach” balancing value with higher-priced indulgent options. He said early results show the menu is performing as expected, with average check increasing and remaining healthy.
On marketing, Pace said the company has been shifting from broad campaigns to a “data-driven First Choice marketing strategy” introduced in the third quarter. He said Red Robin has mapped restaurants across six to eight competitive categories and clustered locations based on trade area dynamics and messaging needs, enabling more locally relevant messaging and improving return on marketing spend. In Q&A, he said the company is roughly “two-thirds of the way through” implementing the approach and expects to continue reallocating spending based on responses across clusters.
Balance sheet actions: Refranchising, refinancing, and ATM termination
Management said it continues to pursue tactical refranchising to support balance sheet and capital structure objectives, with proceeds intended to reduce debt. Pace said the company is encouraged by expressed interest and the progression of discussions, though he did not provide transaction specifics during Q&A.
He also said three current franchise groups have indicated they are pursuing new unit development opportunities within their territories, which he characterized as a sign of franchisee confidence. The CFO said Red Robin ended the fourth quarter with $19.9 million in cash and cash equivalents, $9.6 million in restricted cash, and $37 million of available borrowing capacity under its revolving credit facility.
Pace said improved performance and refranchising progress are expected to expand refinancing options. He also said the company terminated the at-the-market equity program announced the prior November and that no shares were issued under the program before it ended.
2026 outlook: Modest comp growth expected, with pricing and weather in focus
For 2026, management guided to comparable restaurant revenues of 0.5% to 1.5% excluding deferred loyalty revenue, restaurant-level operating profit margin of approximately 13%, adjusted EBITDA of $70 million to $73 million, and capital expenditures of $25 million to $30 million.
In Q&A, the CFO said Red Robin took a 3.2% menu price increase with the late-January menu rollout and expects the full-year pricing impact to be about 3.2%. He also provided early-quarter context, saying quarter-to-date first-quarter comps were down about 1%, with traffic positive in January before Winter Storm Fern and then negative after weather disruptions. He estimated weather could cost about 50 basis points of first-quarter comp performance and said the company had lost 179 operating days quarter to date due to closures or disruptions tied to storms.
On commodities, management said it expects inflation to remain a headwind in 2026, with the CFO stating commodities rose roughly 4% in 2025 and are expected to be about the same in 2026, with beef inflation as the primary outlier.
On the restaurant portfolio, Pace said the company continues to optimize its base, noting that improvements at about 20 restaurants previously considered potential closures moved them off the closure list. He said there may still be “20 for this year” to work through, adding that the headwind previously identified from potential closures has shrunk to about $1.5 million as leases expire and roll off.
About Red Robin Gourmet Burgers (NASDAQ:RRGB)
Red Robin Gourmet Burgers, Inc, trading on NASDAQ under the ticker RRGB, is a leading casual dining restaurant company headquartered in Greenwood Village, Colorado. The company specializes in offering a diverse menu centered on gourmet burgers, bottomless steak fries, salads, sandwiches and a selection of alcoholic beverages. Red Robin operates restaurants under its flagship Red Robin® brand, serving guests through both dine-in and off-premises channels, including delivery and carry-out. The company also leverages technology and loyalty programs to enhance the guest experience and drive repeat visits.
Founded in 1969 in Seattle, Washington, Red Robin began as a small tavern before evolving into a family-friendly restaurant concept focused on premium burgers.
