Kona Grill, Inc. (NASD: KONA), an American grill and sushi bar, recently announced its financial results for the third quarter ended September 30, 2008. Restaurant sales from continuing operations increased 4.3 percent to $19.5 million from $18.7 million during the corresponding quarter in 2007. The increase in restaurant sales during the third quarter reflects additional revenue from three stores opened since November 2007.
The company expects fourth quarter sales to range between $19.3 million to $19.8 million with a net loss from continuing operations of $1.2 million to $1.5 million, or a net loss of $0.18 to $0.23 per diluted share. For fiscal year 2008, the management has revised its guidance to reflect the closure of the Naples, FL restaurant. The company is now forecasting sales of $76.5 million to $77.0 million and a loss from continuing operations of $2.8 million to $3.1 million, or a net loss of $0.43 to $0.48 per diluted share. Craig Hallum upgraded KONA today to “Buy” from “Accumulate” based on valuation.
President and chief executive officer of Kona Grill, Marcus E. Jundt, recently commented, “Like most restaurant companies, our margins continued to be compressed by higher labor and operating costs, however, we were able to offset some of this margin pressure with better management of our food costs despite increases in several of our commodity ingredients in the past year.” He added, “We are on track to open three new restaurants in the fourth quarter. As we look ahead, our financial discipline assures that we will apply capital for only the best possible uses, restricting development to sites that meet our stringent criteria and limiting our debt to levels that maintain maximum financial flexibility.”
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