Shares of Greenwood Village-based Red Robin Gourmet Burgers Inc. dropped 24 percent in after-hours trading Thursday after the company said third-quarter earnings were down 7 percent. The company also reduced its guidance and said it intends to slow the pace of store openings.
Red Robin reported net income of $6 million, or 36 cents per share, in the third quarter. That was down more than 7 percent from $6.5 million, or 39 cents per share, a year ago. The company reported its earnings after the markets closed.
Analysts were expecting earnings of 43 cents per share.
The quarterly earnings included a pretax charge related to the company’s acquisition of 11 franchised restaurants, which reduced earnings by 6 cents per share. They also included a 5-cent-per-share charge for stock-compensation expenses.
Total revenues increased 30 percent to $148.6 million during the quarter.
“While we were pleased with our overall results in the third quarter, recent trends require us to take a more deliberate approach to enhancing unit volumes and brand awareness in our newer markets,” said chairman and chief executive Dennis Mullen. “We will also be pursuing a more conservative new-restaurant-opening growth plan as we continue to aggressively reduce restaurant-construction costs to improve our returns.”
The company said it expects net income of $1.62 to $1.67 per share for the 2006 fiscal year. That was down from the company’s previous guidance of $1.74 to $1.83 per share.
Red Robin has struggled to regain investor confidence since August 2005, when CEO Michael Snyder and chief financial officer James McCloskey resigned after an investigation into Snyder’s travel and entertainment expenses.
Shares of Red Robin closed at $46 Thursday but dropped more than $11 in after-hours trading.
Staff writer Kristi Arellano can be reached at 303-954-1902 or karellano@denverpost.com.
