Company: RRGB
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001171759-25-000012
Chunk: 60

Company: RED ROBIN GOURMET BURGERS INC
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7
Chunk 60
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 fiscal 2024 in line with the reduction in overall selling expense. The percentage of sales each franchisee is required to contribute could change in the future, as we expect to align contributions with spending levels, subject to compliance with the respective franchise agreement. Franchise restaurants reported an increase of 2.6% in comparable restaurant revenue in fiscal 2024 compared to a decrease of 2.3% in fiscal 2023. 

Other revenue primarily comprises gift card breakage, which represents the value associated with the portion of gift cards sold that are unlikely to be redeemed, licensing income, and recycling income. The reduction in other revenue in fiscal 2024 compared to fiscal 2023 primarily relates to a reduction in gift card breakage revenue and recycling income. 

Cost of Sales

(In thousands, except percentages)20242023Percent ChangeCost of sales$292,392 $308,962 (5.4)%As a percent of restaurant revenue23.9 %24.2 %(0.3)%

Cost of sales, which comprises food and beverage costs, is variable and generally fluctuates with sales volume. Cost of sales as a percentage of restaurant revenue decreased 30 basis points in fiscal 2024 as compared to fiscal 2023. The decrease was primarily driven by menu price increases and implementation of various cost savings initiatives, partially offset by commodity inflation. 

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Labor

(In thousands, except percentages)20242023Percent ChangeLabor$479,631 $473,538 1.3 %As a percent of restaurant revenue39.2 %37.2 %2.0 %

Labor costs include restaurant-level hourly wages and management salaries as well as related taxes and benefits. Labor as a percentage of restaurant revenue increased 200 basis points in fiscal 2024 as compared to fiscal 2023. The increase was primarily driven by additional costs in hourly and management labor, increased incentive compensation related to the new Managing Partner bonus plan and higher workers compensation and group health insurance expense.

Other Operating

(In thousands, except percentages)20242023Percent ChangeOther operating$216,242 $224,999 (3.9)%As a percent of restaurant revenue17.7 %17.7 %— %

Other operating costs include costs such as equipment repairs and maintenance costs, restaurant supplies, utilities, restaurant technology, and other miscellaneous costs. Other operating costs as a percentage of restaurant revenue is unchanged compared to the same period in fiscal 2023