This Tiny Restaurant Chain May Be the Next Big Thing
As I've been watching Kona Grill over the years, the one metric that it seemed to be lacking which had kept it from becoming another Chipotle Mexican Grill type of story was truly phenomenal same-store sales growth. With first-quarter preliminary results out that literally made my jaw drop, that has all changed.
Kona Grill has gone on to report fantastic sales results and shoot to new multi-year highs. Kona Grill had guided for $27 million in sales and 3% same-store sales growth. The preliminary results show $27.6 million in revenue, a rise of 17.5%, and same-store sales up 6.2% for more than double the expected growth rate.
Kona Grill notes that the gains came despite "a difficult sales environment, including severe winter weather, cautious consumer spending and a highly competitive landscape." What's particularly interesting about that is in the year-ago period when the company reported negative same-store sales, it blamed the weakness on "inclement weather and economic headwinds." Those factors have arguably gotten worse, not better, especially the weather. This suggests that there's more to the story here than the weather. Perhaps the brand is catching on and results may become even better in the coming months.
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