Ark Restaurants Corp.’s (ARKR) fourth quarter 2010 earnings of 31 cents per share fell 18.4% from 38 cents in the prior-year quarter. The profit of the company declined primarily due to an extra week in the year-ago period.
Ark Restaurants said that total revenue in the fourth quarter declined 4.3% year over year to $32.0 million, as company-wide same-store sales dropped 7.3% year over year in the reported quarter.
The company’s full-year earnings per share were 74 cents versus 87 cents in full fiscal 2009. Revenues were $117.8 million in full fiscal 2010, representing a year-over-year growth of 2.4%.
Inside the Headline Numbers
The operating income of the company plunged 39.8% to $1.1 million in the reported quarter and operating margin contracted 210 basis points (bps) to 3.5%, reflecting a 10 bps increase in food and beverage cost, leap of 50 bps in payroll, upside of 110 bps in occupancy expense, spike of 82 bps in general and administrative expense and expansion of 30 bps in depreciation and amortization, partially offset by a decrease of 60 bps in other operating expenses.
The New York-based Ark Restaurants indicated that adjusted EBITDA in the quarter was $2.7 million compared with $3.0 million in the year-ago quarter.
Net income from operations came in at $1.0 million compared with $1.4 million in the prior-year quarter.
Financial Aspects
As of October 2, 2010, the company had cash, cash equivalents and short-term investments of $9.4 million. Ark Restaurants has no long-term liability.
Our Take
Given the company’s earnings miss and escalating costs, we expect estimates to drop in the coming days.
Ark Restaurants’ close competitor AFC Enterprises Inc. (AFCE) reported its third quarter earnings of 23 cents per share, which was higher than the Zacks Consensus Estimate of 18 cents.
Ark Restaurants through its subsidiaries owns and operates 22 restaurants and bars, 29 fast food concepts and catering operations.
AFC ENTERPRISES (AFCE): Free Stock Analysis Report
Zacks Investment Research
