1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Mrinalini Chaudhuri
Articles (517) 

Investors May Consider This Restaurant Stock

March 27, 2015 | About:

Kona Grill (NASDAQ:KONA) offers guests freshly prepared food, personalized service and a warm contemporary ambiance that creates an exceptional, yet affordable dining experience. The menu features a diverse selection of appetizers, salads, sandwiches, chicken, seafood, steaks, pasta and pizzas that incorporate over 40 signature sauces and dressings that are made from scratch using high-quality, fresh ingredients. Kona Grill also offers guests a wide selection of award-winning sushi, including sashimi, traditional favorites and several proprietary dishes.

It features American favorites with an international influence and award-winning sushi in a casually elegant atmosphere. Kona Grill owns and operates 31 restaurants.

Fourth Quarter 2014 Highlights vs. Year-Ago Quarter

  • Restaurant sales increased 29.1% to $31.6 million.
  • Same-store sales increased 3.1%, marking growth in 17 of the last 18 quarters.
  • Opened three new restaurants in Sarasota, Florida, Alpharetta, Georgia, and Columbus, Ohio.
  • Average weekly sales for non-comparable base restaurants totaled $85,600 compared to $82,600 for comparable base restaurants.
  • Restaurant operating profit*, a non-GAAP measure, increased 33.5% to $5.3 million from $4.0 million.
  • Net loss of $916,000, or ($0.08) per diluted share compared to net loss of $509,000, or ($0.06) per diluted share.
  • Adjusted EBITDA*, a non-GAAP measure, increased 17.2% to $2.4 million compared to $2.0 million.

"Fourth quarter 2014 results exceeded our expectations and we are extremely pleased that our sales momentum has carried into 2015 as we lap a 6.2% comp in the first quarter of 2014," said Berke Bakay, president and CEO of Kona Grill. "Our new restaurants generated average weekly sales in excess of both our projections and core restaurant base, reflecting strong consumer demand for our differentiated polished casual dining experience, the compelling quality of our new restaurant design, strong business model and engaging guest hospitality."

Bakay continued, "We achieved our 20% annual unit growth target in 2014 by opening five restaurants, including three restaurants during the fourth quarter. With two additional leases in hand, including our first restaurants slated for the states of California and Tennessee, our pipeline remains robust with a total of 12 signed leases. Our highly desirable profile within the development community affords us with great real estate opportunities and we are excited by the seven new restaurants we have planned for 2015. These restaurants represent annual unit growth of 23% and provide an appropriate balance of new and established markets."

Bakay concluded, "Given the momentum and portability of our brand domestically, combined with demand outside of the U.S. for compelling casual dining concepts, we have taken the initial steps towards international expansion through our recent hiring of Carlos de León as Vice President of International Development. Interest from potential international partners is strong, and we are enthusiastic about this long-term growth opportunity."

Fourth quarter 2014 financial results

Restaurant sales in the fourth quarter of 2014 increased 29.1% to $31.6 million compared to $24.5 million in the fourth quarter of 2013. This increase was driven by operating week growth of 24% and a same-store sales increase of 3.1% compared to 3.5% in the year-ago quarter. The increase in same-store sales reflects the combination of customer traffic which grew 1.6% and average check per customer which rose 1.5%. Seven non-comparable base restaurants contributed $6.7 million in restaurant sales during the fourth quarter of 2014, reflecting 79 operating weeks, compared to $1.3 million in the fourth quarter of 2013, reflecting 13 operating weeks.

Average weekly sales for comparable base restaurants totaled $82,600 in the fourth quarter of 2014 compared to $79,200 in the fourth quarter of 2013, representing an increase of 4.3%. Average weekly sales for the seven non-comparable base restaurants in the fourth quarter of 2014 totaled $85,600 and were above expectations, and compared to $101,600 for the two non-comparable restaurants opened in the fourth quarter of 2013.

Recently it opened a new restaurant in San Juan, Puerto Rico on March 26, 2015. "Opening in the center of San Juan puts our new restaurant in the middle of one of the densest markets yet. We anticipate many of San Juan's four million visitors and two and a half million residents will walk away highly impressed with our differentiated polished casual dining experience. The Mall of San Juan is a first-of-its-kind, high-end retail center and opening a new restaurant in this attractive location reinforces our view that Kona Grill is a cut above its peers and is compatible to a wide variety of real estate options," said Berke Bakay, President and CEO. "Our 2015 development program, which entails seven new Kona Grills, is in full swing and we're excited to bring the Kona Grill experience to San Juan, our first new restaurant of the year."

(Source: Company’s Website)

To end

Restaurant stocks are booming, and this company is no exception. Perceptions have changed as regards the way people eat out. This company posted solid quarterly report and is expected to create shareholder returns in the near future. Investors may add this company to their portfolio.

This American grill and sushi bar has huge potential and is currently focusing on brand building and expansion. It is a long-term stock. Now people are more health conscious and this company boasts of an array of healthy food options.

Rating: 0.0/5 (0 votes)


Ahmed Yasir
Ahmed Yasir - 2 years ago    Report SPAM

Again copy pasted.

Ahmed Yasir

Please leave your comment:

Performances of the stocks mentioned by TaniaC

User Generated Screeners

glenh967Small Cap investing universe
flaabValue Screener
soho_analogusd project2018
pbarker46Total Payout Yield
DBrizanrota16Jan2018 1143p
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat