X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SCOTTSDALE, AZ-The small but growing Kona Grill American grill and sushi bar chain prevailed over tough economic conditions to boost earnings in the second quarter and plan expansion for the rest of the year, the company reported Monday in its quarterly earnings conference call with financial analysts. Kona, which operates 16 restaurants after opening two new locations in the second quarter ended June 30, anticipates opening an additional two new restaurants in fiscal year 2007 in Baton Rouge, LA and Stamford, CT during the fourth quarter.

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.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.