ROCE Insights for Red Robin Gourmet Burgers

After pulling data from Benzinga Pro it seems like during Q1, Red Robin Gourmet Burgers RRGB posted sales of $326.27 million. Earnings were up 89.62%, but Red Robin Gourmet Burgers still reported an overall loss of $4.33 million. In Q4, Red Robin Gourmet Burgers brought in $201.05 million in sales but lost $41.74 million in earnings.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in Red Robin Gourmet Burgers's Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q1, Red Robin Gourmet Burgers posted an ROCE of -0.04%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows Red Robin Gourmet Burgers is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher returns and earnings per share growth.

In Red Robin Gourmet Burgers's case, the ROCE ratio shows the amount of assets may not be helping the company achieve higher returns. Investors may take this into account before making any long-term financial decisions.

Analyst Predictions

Red Robin Gourmet Burgers reported Q1 earnings per share at $-0.3/share, which beat analyst predictions of $-1.16/share.