Red Robin Gourmet Burgers (RRGB) reported first quarter 2011 earnings above the Zacks Consensus Estimate, as it experienced an upside in revenue and margin. The company's plan to turn around its business by Project RED, which focuses on revenue growth, expense control and capital deployment is progressing quite successfully.
The company is taking host of initiatives to control cost and target cost savings of $16-18 million by the end of 2012. The company is also experiencing higher traffic and same-store sales growth aided by loyalty program, increased bar focus, pricing action, new menu and social media efforts.
Moreover, focus on franchising, reducing debt and enhancing shareholder value also augurs well. Therefore, we are upgrading the stock from Neutral to Outperform.
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