Red Robin Gourmet Burgers Inc. suffered its worst stock decline in nine months after the restaurant chain cut its revenue forecast and scaled back expansion plans.
Revenue will only grow about 8 percent this year, Red Robin said in a statement on Tuesday. The company had previously estimated a gain of as much as 9.5 percent. The chain’s customer traffic has slumped recently, contributing to a 2.6 percent drop in same-store sales in the first quarter.
The waning demand deals a setback to a company working on an image makeover. Its new Red Robin Burger Works brand is focused on serving food in less than five minutes, letting it compete with fast-casual chains such as Five Guys Burgers & Fries and Smashburger. Red Robin now plans to open just three of the Burger Works locations this year, down from a previous goal of five stores. It has a total of about 540 restaurants.
The shares dropped as much as 11 percent to $55.16 in New York, the biggest intraday decline since Aug. 11. Through Monday, the stock had gained 0.4 percent in 2016.