Hedgeye CEO Keith McCullough is adding Red Robin Gourmet Burgers (RRGB) to the short side of Investing Ideas. Below is a brief note.
Thankfully we aren't choking on 10-20 SELL ideas here in RTA during this #Quad3 US stock market melt-up...
But here's a new one for you that is similar to the CAKE short idea by Howard Penney (yes, I'd short more of that oinker on green): Red Robin (RRGB).
|
Here's a good summary excerpt from Howard's Consumables Pro research product on the name: RRGB is a Short. RRGB is significantly lowered after the company posted EPS of -$0.22, misses by $0.22, and total revenue of $277.0M, misses by $3.0M. Restaurants that we could operate at total capacity saw comparable restaurant revenue increase 7.0% from the pre-pandemic comparable quarter. In addition, margins at these restaurants reached 19.5%, a 180 bps increase. However, overall comparable restaurant sales are still down 2.4% compared to 2019. "Overall performance in the second quarter was below our expectation," said CEO Paul J. B. Murphy III. "Contributing factors included ongoing jurisdictional restrictions and challenging labor availability which resulted in reduced operating hours." The rollout of Donato's will ultimately fail when national advertising does not deliver the intended results. |
Sell the bounce to lower-highs,
KM