Red Robin shares dive after weak Q1 results, broker downgrade

(Reuters) - Shares of Red Robin Gourmet Burgers Inc (RRGB.O) dived 20 percent Friday, a day after the casual dining restaurant chain posted a lower quarterly profit, hurt by an 8.1 percent decline in company-owned comparable restaurant sales.

J.P. Morgan Securities downgraded the stock to "neutral" from "overweight," saying the company saw a significant deceleration in comparable-store sales in the first quarter and into the second quarter at a time when several other casual dining companies were seeing stable or improving trends.

"Expense-driven margin management will continue to be a theme for the rest of 2009, but we believe this is largely reflected in consensus estimates, making the next leg up in the stock dependent on stabilizing or improving comp trends, which remain elusive," analyst Steven Rees wrote in a note to clients.

On Thursday, the company posted a 47 percent fall in first-quarter profit, and said it expects certain costs to pressure restaurant-level profitability in fiscal 2009.

"Significantly negative same-store sales and soft top-line trends reinforce our concerns of increasing teen unemployment, decreased advertising and peer discounting," Oppenheimer analyst Matthew DiFrisco said.

Shares of the company fell more than 16 percent to $18.05 Friday morning, making them one of the top percentage losers on Nasdaq. They earlier touched a low of $17.37.

(Reporting by Mihir Dalal in Bangalore; Editing by Deepak Kannan)