Despite what Kona's CEO Marcus E. Jundt called "a challenging economic environment," the company posted a 5% same-store sales increase in the second quarter and earned five cents per share for net income of $313,000 against a loss of five cents a share in the same quarter last year.
Kona reported that its same store sale increase reflected increased customer traffic coupled with higher menu prices. Total sales climbed 62.7% to $19.3 million.
Jundt sounded what is becoming a familiar refrain in the restaurant industry, with many companies commenting on tough economic conditions when they host their quarterly conference calls with analysts. "Like most restaurant companies, we face higher costs for food and labor when compared with last year," the Kona CEO and president said.
"We are pleased with what we accomplished against the backdrop of a challenging economic environment and continued pressure on food and labor costs," Jundt said in the conference call. He noted that the company opened a restaurant in the Detroit suburb of Troy, MI during the quarter and that the location has performed well even though Kona has no other stores in the area to give it instant brand recognition.
In spite of its success in the second quarter, Kona expects that its profits will be slim in the third quarter, forecasting earnings that will fall somewhere between a loss of $100,000 to a profit of $200,000 for the quarter. This range includes theestimated effect of expensing noncash stock-based compensation that isestimated to total between two cents and three cents per diluted share for the third quarter.
Kona owns and operates restaurants in Arizona, Colorado, Florida, Illinois, Indiana, Michigan, Missouri, Nevada and Texas.
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