Red Robin Gourmet Burgers Shares Drop On 1Q Result

NEW YORK (AP) — Shares of Red Robin Gourmet Burgers Inc. dropped Friday after the company reported a drop in fiscal first-quarter profit and warned its results would continue to be pressured by food costs, minimum-wage increases and traffic declines.

Shares slid $3.91, or 18.1 percent, to $17.70 in afternoon trading.

After the market closed Thursday, Red Robin reported its first-quarter profit fell 47 percent as sales at locations open at least a year, or same-store sales, fell 8.1 percent. The company's results were hurt by compensation expenses related to the company's tender offer for stock options and the cost of closing several locations.

The adjusted profit beat Wall Street analysts' average estimate for the quarter, according to a survey by Thomson Reuters.

The company also said same-store sales for the current quarter were down about 11 percent so far.

KeyBanc Capital Markets analyst Brad Ludington said in note to investors he expects same-store sales to "remain significantly strained" in the coming months, but said controlling costs could help minimize any hit to margins.