Zacks_Analysts' Blog : Ark Restaurants Surpasses Estimates - Analyst Blog

Ark Restaurants Corp. (ARKR) reported third quarter 2010 earnings of 83 cents per share, which topped the Zacks Consensus Estimate of 67 cents and soared 80% from 46 cents a year earlier. The better-than-expected results were driven by double-digit growth in the top line, resulting from improving same store sales.

Ark Restaurants said that total revenue in the third quarter spiked 13.2% year over year to $35.2 million, as company-wide same-store sales rose 9.0% year over year.

The operating income of the company leaped 74.0% to $4.3 million in the reported quarter and operating margin expanded 430 basis points (bps) to 12.3%, reflecting a contraction of 230 bps in payroll, a decline of 120 bps in occupancy expense, a decrease of 80 bps in general and administrative expense and a 10 bps’drop in depreciation and amortization, partially offset by a 10-bp increase in both food and beverage cost and other operating expenses.

The New York-based Ark Restaurants indicated that adjusted EBITDA in the quarter was $5.2 million, compared with $3.6 million in the year-ago quarter.

Interest expense in the third quarter was $3.0 million, compared with an interest income of $45 million in the prior-year quarter.

Net income from operations came in at $2.9 million, compared with $1.6 million in the prior-year quarter.

Financial Aspects

As of July 3, 2010, the company had cash, cash equivalents and short-term investments of $9.1 million. Ark Restaurants has no long-term liability.

Ark Restaurants’ close competitors Buffalo Wild Wings Inc. (BWLD) and Caribou Coffee Company Inc (CBOU) reported their second quarter earnings, which were higher than the Zacks Consensus Estimates. Buffalo’s second quarter 2010 earnings of 50 cents per share beat the Zacks Consensus Estimate of 42 cents. Even Caribou Coffee’s second quarter earnings of 12 cents topped the Zacks Consensus Estimate of 3 cents.

Ark Restaurants through its subsidiaries owns and operates 20 restaurants and bars and 31 fast food concepts and catering operations.