Consistent with its aggressive unit expansion, Red Robin Gourmet Burgers Inc. (RRGB) has recently announced that it will unveil a restaurant each in Palm Beach, FL and Bronx, New York City on Oct 13. While the Florida restaurant will be located on Palm Beach Lakes Blvd. at the main entrance of the Palm Beach Outlets, the other one will be located in Mall at Bay Plaza, just off the Hutchinson River Parkway on Baychester Drive.
Both the restaurants will offer signature food items like Royal Red Robin Burger and Bottomless Steak Fries, in addition to signature Freckled Lemonade. The company will contribute the sales of its signature Freckled Lemonade at both the outlets on the opening day to the non-profit entity — Alex's Lemonade Stand Foundation.
Red Robin’s unit expansion remains unruffled amid an uncertain economy. With the resurgence of consumer confidence, management accelerated unit openings and expects to open 25 restaurants in fiscal 2014. Currently, the restaurateur operates 500 units across the United States and Canada. Moreover, the company is exploring new development opportunities in untapped markets of Florida, New York, New Jersey, Chicago and Texas to further enhance its domestic presence.
However, Red Robin has been struggling in the recent times as commodity inflation increased costs and second-quarter 2014 profit slid 15.5%. Therefore, we believe the company’s plan of accelerating unit growth would boost revenues over the long term.
Further, we are encouraged with the company’s initiatives including menu innovation, effective marketing strategy, unit expansion and remodeling programs to reinvigorate its brands. We believe the company is well poised to sustain its growth momentum driven by improved guest traffic and innovative offerings.
Better-performing stocks in the restaurant industry include Chipotle Mexican Grill, Inc. (CMG), DineEquity, Inc. (DIN) and Jack in the Box Inc. (JACK).
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