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Ark Restaurants Corp. (ARKR) Message Board

  • vdronex vdronex May 17, 2011 1:40 PM Flag

    Thoughts on Earnings

    Rough quarter but given the increases in commodity's across the board i'm not really shocked. I haven't dug into the actual financials yet, but this was also the slowest quarter historically for ARKR if I'm not mistaken. I wonder if price increases are being considered or if we see a significant decline in commodity prices like we did a few summers ago. Any thoughts?

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    • Hello:

      Yes, price increases have already been enacted. According to the conference call, they were selectively put in place in late March, beginning of April. The price increases did not have much effect on last quarter, but will have full effect on upcoming quarters.

      According to management, increases in food prices certainly did hurt the quarter. Cost of Goods Sold (COGS) used to be around 25.5% but lately have been up to 27 to 28%. Margins will improve in the near future. Price increases (so far) have been accepted by customers.

      What is really killing the margins though is not so much the increase in food prices (which hurts) but the accompanying increase in minimum wage (esp. in NYC), increase in utility expenses, increase in insurance costs, etc.

      I will post a detailed report of the conference call after work tonight.

 
ARKR
21.7501-0.0199(-0.09%)Nov 28 12:18 PMEST

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