Ahead Of The Bell: Red Robin

NEW YORK (AP) — The accelerating decline in same-store sales at Red Robin Gourmet Burgers Inc. is worrisome, but cost reductions and a fresh advertising focus could limit the impact on earnings for the rest of the year, analysts said Friday.

The comments came a day after the casual dining chain reported a 47 percent decline in first-quarter earnings as sales at stores open at least a year fell 8.1 percent. The compoany said the same-store sales decline — a key metric of retail health — accelerated to 11.1 percent in the first four weeks of the current quarter.

Cost controls, such as cutting its ad budget, "should provide a relative floor" for earnings this year, analyst Fitzhugh Taylor of Thomas Weisel wrote in a note to investors. Beyond that, he said "visibility drops off significantly."

Taylor cut his forecast for the year by 9 cents to $1.63 per share.

Jefferies & Co. analyst Jeff Farmer cut his 2009 earnings-per-share estimate by 9 cents to $1.70. But he expects May same-store sales will be the chain's low point, and that its TV advertising strategy in June — inexpensive and focusing on images of its popular steak sliders — will be effective.