Red Robin Burgers Fried

Shares fall 19% after an earnings miss.
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Red Robin Gourmet (RRGB) - Get Report plunged 19% late Thursday after the burger chain trimmed fourth-quarter targets, saying it needs to slow new restaurant openings.

The Greenwood Village, Colo., company says it "serves up fun, feel-good experiences by offering its guests an imaginative selection of high-quality gourmet burgers and innovative menu items in a family-friendly environment."

But shareholders weren't having much fun after the company said earnings for the quarter ended Oct. 1 fell to $6 million, or 36 cents a share, from the year-ago $6.5 million, or 39 cents a share.

The latest quarter included a 6-cent-a-share charge for the acquisition of 11 restaurants. Excluding the charge, latest-quarter earnings were 42 cents a share, a penny shy of the Thomson Financial target.

Revenue rose 30% from a year ago to $148.6 million, beating the $148.3 million Thomson target.

"While we were pleased with our overall results in the third quarter, recent trends require us to take a more deliberate approach to enhancing unit volumes and brand awareness in our newer markets," CEO Dennis Mullen said. "We will also be pursuing a more conservative new restaurant opening growth plan as we continue to aggressively reduce restaurant construction costs to improve our returns. This more conservative growth plan reflects our commitment to allocate shareholder capital prudently to enhance our return on capital investments."

The company said it expects to make 33 to 38 cents a share for the fourth quarter on sales of $157 million. Analysts were looking for 49 cents on $164 million.

Shares fell $9 to $37.