Red Robin shares responded in an unorthodox manner after a drop in Q4 revenues. RRGB stock soared 0.04% on Jan. 27, 2021.
Red Robin (RRGB) shares traded in the green zone on Wednesday, a couple of weeks after it updated regarding its fourth quarter 2020 results. The company reported unaudited and preliminary revenue which dropped 28.9% during the quarter.
Though the company won a great deal strengthening its operation execution and business plans to ensure the capital flow—maintaining liquidity. That might be the one reason why Red Robin shares responded stiffly. Rather, the shares price soared from $22 to $24—in the following two days—when the company updated the Q4 results on Jan. 11.
Red Robin, is an American chain of casual dining restaurants. The company has largely been affected by the restriction amid the COVID-19 pandemic. Although the company kicked off fourth-quarter on a stronger side, the momentum was badly impacted by social-distancing restrictions and dining closures.
In the near-term, things will probably remain volatile because it will take time for restaurants to begin full operations. The CEO of Red Robin, Paul J.B. Murphy III stated that the company has worked on business models to cope up with this situation. Whereas, the company is well-positioned from both a sales and profitability standpoint as soon as the conditions normalize.
Paul further added that they are focusing to create long-term value for all shareholders as they move into 2021.
The company is going to implement cost-cutting strategies to improve its productivity during the pandemic period. This will help Red Robin to enhance growth and increase saving to keep the business running.
Red Robin has reduced its menu by almost 1/3, which will help the company to improve operational execution—saving more than $2 million in annual savings. While increase the savings through general and administrative expenses reduction by over 10%. The company will also implement a new management-labor structure that will save $14 million annually. So, through such policies, the company would be able to improve its productivity and run the operations smoothly.
By the end of Dec. 2020, the company mentioned that it had started dining room operations across 246of its restaurants. Moreover, almost 35 dining rooms have also reopened this year so far, with 4 additional re-opening under progress.
In the last three months of 2020, Red Robin (RRGB) stock soared up to 45% compared to industry growth of almost 8%. This shows that the company is steadily progressing in the right direction, pushing the stock towards bullish momentum. With the new business plan, the company expects things to get better this year. So, we can see RRGB shares pushing further in the coming months.