GREENWOOD VILLAGE, Colo.—Shares of Red Robin Gourmet Burgers Inc. surged on Thursday after the hamburger chain said its second-quarter net income rose 12 percent as more people headed to its restaurants.
The results beat Wall Street estimates.
Like its peers, Red Robin is facing higher costs for food and beverages, but it has offset those increases by cutting labor and other operating costs.
The increase in customer count was a welcome change from last quarter, when the Greenwood Village, Colo.-based company said 3.6 percent fewer customers visited its restaurants, lured by heavy discounting from some competitors.
Net income for the three months ending July 8 rose to $7.7 million, or 52 cents per share. That compares with $6.9 million, or 44 cents per share, a year ago. Analysts expected 50 cents per share, according to FactSet.
Revenue rose 4 percent to $223.7 million from $215.8 million. Analysts expected revenue of $225.1 million.
Revenue at stores open at least one year rose 0.8 percent during the quarter, helped by more customers heading into the restaurant. Red Robin expects revenue in stores open at least one year to rise 0.5 percent for the year.
Red Robin operates 466 restaurants in the U.S. and Canada, including 329 of its own and 133 franchise restaurants.
Shares rose $4.07, or 14.1 percent, to $32.75 in midday trading. The stock had been up 3.5 percent for the year. Its shares peaked for the year at $37.98 per share in mid-March.
