Red Robin shares fall as company cuts 2006 forecast

News staff and wire

Published November 3, 2006 at midnight

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Red Robin Gourmet Burgers Inc. shares fell as much as 29 percent after the hamburger restaurant chain cut its forecast for 2006 sales and profit.

The shares fell $12.45 to $33.55 as of 10:38 a.m. New York time in Nasdaq Stock Market composite trading,

and earlier touched $32.42.

Red Robin, which has more than 330 restaurants in the U.S. and Canada and intends to open 32 company-owned

sites and 15 or 16 franchises this year, trimmed its profit forecast for the year to $1.55 to $1.60 a share from $1.67 to

$1.76. Analysts surveyed by Thomson Financial had expected an average $1.78 a share.

"They cut it based on lower sales contributions from new restaurant openings in the last 15 months and because of a

sequential decline in same-store sales," said Destin M. Tompkins, an analyst at Morgan Keegan & Co., in a telephone

interview.

"This is a pretty significant reduction."

Tompkins, who had rated the stock "market perform," cut his earnings estimate for the company to $1.65 a share

from $1.83 and his 2007 forecast to $1.90 from $2.20. He doesn’t own the shares.

Comparable-store sales for company-owned locations rose 0.8 percent in the third quarter, the Greenwood Village,

- based company said yesterday. That’s at the low end of an August projection of 0.5 percent to 1.5 percent

growth.

Average weekly sales for company-owned stores open at least a year fell to $62,767 in the third quarter from

$65,404 in the second quarter.

Red Robin said 2006 sales will be $611 million to $613 million, down from an August outlook of $615 million to $618

million.

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