Red Robin Gourmet Burgers reported financial results for the first quarter ended April 17, 2016.
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Adjusted net income increased 12.5% to $17.6 million from $15.6 million for the same period a year ago.
Excluding the impact of $0.20 per diluted share related to litigation contingencies, and a charge of $0.04 per diluted share for restaurant impairment, adjusted earnings per diluted share for the sixteen weeks ended April 17, 2016 was $1.27, an increase of 15.5% from $1.10 for the same period a year ago.
Total company revenues, which primarily include company-owned restaurant revenue and franchise royalties, increased 1.8% to $402.1 million in the first quarter of 2016 from $394.9 million in the first quarter of 2015.
Restaurant revenues increased $19.6 million due to new restaurant openings and acquired restaurants, partially offset by an $11.0 million, or 2.9%, decrease in comparable restaurant revenue, which included a $1.2 million, or 0.3%, unfavorable foreign exchange impact, and $0.4 million from closed restaurants.
Franchise and other revenue decreased $1.0 million, primarily driven by a decrease in gift card breakage revenue from the same period a year ago.
System-wide restaurant revenue (including franchised units) for the first quarter of 2016 totaled $493.0 million, compared to $488.1 million for the first quarter in 2015.
Using constant currency rates, comparable revenue decreased 2.6% in the first quarter of 2016 compared to the same period a year ago, driven by a 4.1% decrease in guest counts, which was partially offset by a 1.5% increase in average guest check.
Comparable restaurants are those company-owned restaurants that have operated five full quarters during the period presented, and such restaurants are only included in the comparable metrics if they are comparable for the entirety of both periods presented.
Restaurant-level operating profit margin (a non-GAAP financial measure) was 22.5% in the first quarter of 2016 compared to 23.0% in the same period a year ago. First quarter 2015 included an 80 basis point benefit from lower health care and workers’ compensation costs.
Excluding this benefit a year ago, the 30 basis point margin increase in the first quarter of 2016 resulted from a 70 basis point increase in labor costs, a 50 basis point increase in other restaurant operating expenses, and a 40 basis point increase in occupancy costs, offset by a 190 basis point decrease in cost of sales. ■