Kona Grill makes adjustments to increase sales SanTan Sun News

Kona Grill makes adjustments to increase sales

June 17th, 2017 | by SanTan Sun News
Kona Grill makes adjustments to increase sales
Business
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By SanTan Sun News Staff

Kona Grill Inc., an American grill and sushi bar with more than 30 locations, including the Chandler Fashion Center, has reported restaurant sales increased 15.1 percent to $45.2 million. The financial results were part of the company’s first-quarter filing, ending March 31.

“First-quarter results are indicative of both the challenging operating environment and the changing retail and restaurant landscape,” said Berke Bakay, Kona Grill’s president and CEO, adding the company has taken steps to lower costs and expenditures and focus on boosting sales in a challenging climate.

“Our same-store sales decreased following six consecutive years of positive same-store sales, as we faced our most difficult comparison of the year,” he added. “On a two-year basis, however, flat same-store sales outpaced many of our casual dining peers. We believe this reflects our relatively stronger position within the industry.”

According to the filing, Kona Grill had a net loss of $3.4 million, or 33 cents per share, compared to a net loss of $1.7 million, or 15 cents per share in 2016.

“For 2017, we have reduced our targeted restaurant openings to one versus three originally and eight in 2016. This has enabled us to lower capital expenditures and focus on building sales and ramping up margins across the entire system,” Bakay said. “In particular, we would expect margins to improve sequentially at our non-comparable restaurants as they mature and we move through 2017.”

Restaurant operating profits decreased 20.5 percent to $4.6 million, compared to $5.8 million in 2016.

“In light of more modest unit growth, we have eliminated certain positions within our corporate office and are evaluating other cost savings initiatives,” he added. “We have also right-sized the management teams at lower-volume restaurants and certain other restaurants. The combination of these efforts should yield annual cost savings of $3 million. In addition, we continue to evaluate our underperforming restaurants and are engaged in discussions with our landlords regarding rent abatement or potential closure of certain locations.”

In April 2017, the Kona Grill signed a franchise agreement with ZZen Design Build Limited for the development of a Kona Grill restaurant in Toronto, Canada. Kona Grill also expects to open three restaurants this year in United Arab Emirates, Mexico, and Canada.

Kona Grill features a menu of contemporary American favorites, sushi and specialty cocktails in an upscale casual atmosphere. For more information, visit konagrill.com.

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