Red Robin Gourmet Burger (RRGB) is on the Hedgeye Restaurants Best Ideas List as a LONG.
HEDGEYE OPINION
After what was a rocky 3Q16, Red Robin Gourmet Burger (RRGB) vowed to make full scale institutional changes in an effort to reenergize consumer sentiment. We outlined these changes in a previous note of ours from November 2016, titled Seeing the Light, found HERE. In summation, management declared that they would make the following changes:
- Cut growth capital spending
- Potentially sell real estate
- Sell-off/close non-core assets in order to simplify operations
- Streamline SG&A
In their effort to create stability, RRGB is also shoring things up in the C-suite, as they named Guy J. Constant Executive Vice President and Chief Financial Officer yesterday, effective December 14, 2016 (CLICK HERE for the official press release). Mr. Constant is replacing Terry Harryman, who has been interim CFO since Stuart Brown resigned from the position in July 2016. Mr. Constant brings more than 20 years of corporate finance leadership, with more than a decade in the restaurant industry. This hire brings significant credibility and stability to RRGB’s front office, as Mr. Constant’s extensive experience in operations, financial planning, strategic development and execution, and investor relations will work in RRGB’s favor, as they focus efforts on improving efficiency and reducing ticket times with the continued roll out of their Kitchen Display System (KDS). With this move, it is clear that Red Robin is working to put the pieces in place to allow for a strong and focused transition going forward.
In addition to the announcement of their new hire, RRGB also unveiled their new partnership with DoorDash, which would bring burger delivery to 70 RRGB restaurants across the country. Locations include: Phoenix, AZ; Seattle, WA; Los Angeles, CA; Indianapolis, IN; San Francisco, CA; Chicago, IL; Dallas, TX; Houston, TX; Charlotte, N.C.; Washington, D.C.; Columbus, OH; and Minneapolis, MN. According to the Company, a full rollout of carryout, delivery, and catering options is planned for 2017, but it is still unclear if DoorDash will be the exclusive partner for the grand rollout. Nonetheless, this is another step in the right direction, as RRGB works to build their off-premise business in an effort to improve consumer sentiment.
Please call or e-mail with any questions.
Howard Penney
Managing Director
Shayne Laidlaw
Analyst
