Kona Grill Inc (NASDAQ:KONA) Tanks After Hours on Earnings Announcement

Kona Grill Inc (NASDAQ:KONA)

Shares of Kona Grill Inc (NASDAQ:KONA) dropped 24%, or (-$0.65), in the after-market following the company’s Q32017 earnings release. The company reported a sales increase of 2.4% to $44.4 million. However, same-store sales decreased 7.2% – including an estimated 1.1% impact from closures due to Hurricanes Harvey, Irma, and Maria. Those weather-related events impacted 30% of the company’s restaurant base. Net loss of (-$3.3 million), or ($0.33) per share, which included an estimated ($0.02) per share impact from the hurricanes, compared to net loss of $2.6 million, or ($0.24) per share for the same period in 2016.

Kona Grill Inc (NASDAQ:KONA)

Berke Bakay, President and CEO of Kona Grill Inc (NASDAQ:KONA) stated “We remain resilient in spite of the challenges that we encountered during this quarter, including one-third of our restaurants being impacted by closures from the three major hurricanes that hit during August and September which we estimate resulted in approximately $500,000 of lost sales. Our restaurant in San Juan recently reopened with scaled back hours and a limited menu after the devastation caused by Hurricane Maria. We are fortunate that minimal physical damage was sustained at our restaurants.”

Also included in the earnings release was a note that the company’s Mexican franchise partner opened the first franchised Kona Grill restaurant in Monterrey, Mexico in August. The company’s franchise partner in the United Arab Emirates is scheduled to open in Dubai later this month while the first Kona Grill in Toronto, Canada is scheduled to be opened in December 2017. The Company continues to engage in discussions with additional franchise partners.

KONA Stock Performance

Kona Grill Inc (NASDAQ:KONA) sales have increased annually. In 2012, the company posted revenues of ($96 million. By 2016 Kona sales were $169.5 million. Unfortunately, the sales increase has not been translated to the company’s earnings. In 2012 the EPS was $0.60, and four years later, in 2016, the figure was a loss of (-$2.00).

That has led investors to abandon KONA shares. Year-to-date, the stock is down 80%. For the month, shares are down 30%. While the consensus, one-year price target is $4.50, shares are just $0.55 away from their 52-week low of $1.50 and $12 away from their 52-week high of $13.50.

Seven firms follow Kona Grill Inc (NASDAQ:KONA). Five rate KONA stock as a “Strong Buy”, one rates the shares as a “Buy” and one rates them as a “Hold”.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.