Loading...
01/09 19:53
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals: increased net loss and decreased margins are negative, but the company has no debt and expects positive comps in Q2. The decoupling of the reservation system and successful promotions are positive. Tariff impacts remain a concern, though potential relief could improve costs. The strategic plan for FY26 shows growth potential, but unclear guidance on pricing and long-term growth targets tempers optimism. The overall sentiment is neutral, with no extreme catalysts to suggest significant stock price movement.
Total Sales $73.5 million, representing a year-over-year increase from $64.5 million. The increase was driven by a 3.5% menu price increase effective November 1, though the full quarter benefit was not realized.
Comparable Sales Growth Negative 2.5% year-over-year, attributed to a 2.5% decline in traffic and flat price and mix.
Cost of Goods as a Percentage of Sales 29.9%, up from 29% in the prior year quarter, primarily due to tariffs on imported ingredients.
Labor as a Percentage of Sales 32.5%, down from 32.9% in the prior year quarter, due to pricing and operational initiatives, offset by sales deleverage and labor inflation.
Occupancy and Related Expenses as a Percentage of Sales 7.9%, up from 7.4% in the prior year quarter, due to sales deleverage.
Depreciation and Amortization Expenses as a Percentage of Sales 5.4%, up from 4.8% in the prior year quarter, due to sales deleverage and remodel costs.
Other Costs as a Percentage of Sales 16.1%, up from 14.5% in the prior year quarter, due to sales deleverage and higher marketing costs, as well as tariffs on overseas purchases.
General and Administrative Expenses as a Percentage of Sales 13%, down from 13.5% in the prior year quarter, including 30 basis points in litigation accruals.
Operating Loss $3.7 million, compared to $1.5 million in the prior year quarter, largely due to tariff pressures on food and beverage costs and other cost line items.
Net Loss $3.1 million or negative $0.25 per share, compared to $1 million or negative $0.08 per share in the prior year quarter, driven by increased costs and tariff pressures.
Adjusted Net Loss $2.8 million or negative $0.23 per share, compared to $1 million or negative $0.08 per share in the prior year quarter, excluding litigation accruals.
Restaurant-Level Operating Profit as a Percentage of Sales 15.1%, down from 18.2% in the prior year quarter, due to increased costs and tariff pressures.
Adjusted EBITDA $2.4 million, down from $3.6 million in the prior year quarter, reflecting increased costs and tariff pressures.
Cash, Cash Equivalents, and Investments $78.5 million at the end of the fiscal first quarter, with no debt.
Robotic Dishwashers: Manufacturing is proceeding on schedule, with installation expected to begin in Q3 and retrofitting of 50 eligible restaurants to be completed by the end of the fiscal year.
New Market Expansion: Opened 4 restaurants in Q1 (Arcadia and Modesto in California, Freehold and Lawrenceville in New Jersey). 10 restaurants are under construction, including new markets in Tulsa and Charlotte.
Cost Management: Reduced G&A as a percentage of sales by 80 basis points. Labor costs improved by 100 basis points due to operational initiatives.
Sales Performance: Total sales for Q1 were $73.5 million, with comparable sales growth of -2.5%, outperforming expectations.
Marketing Initiatives: Launched a campaign with Kirby, introduced IP-themed Mr. Fresh domes and touch panels, and began advertising a reservation system decoupled from the rewards program to encourage adoption.
Pricing Strategy: Implemented a 3.5% menu price increase on November 1, with full benefits expected in subsequent quarters.
Comparable Sales Decline: The company reported a negative 2.5% comparable sales growth for the fiscal first quarter, with negative traffic of 2.5%. This decline in sales performance could adversely impact revenue and profitability.
Tariff Pressures: Tariffs on imported ingredients have increased food and beverage costs as a percentage of sales to 29.9% from 29% in the prior year quarter. This adds pressure to the company's cost structure and margins.
Labor Costs and Inflation: Labor and related costs as a percentage of sales were 32.5%, slightly lower than the prior year but still impacted by labor inflation and sales deleverage. This could challenge the company's ability to manage operational costs effectively.
Sales Deleverage: Sales deleverage has negatively impacted several cost categories, including occupancy expenses, depreciation, and other costs, leading to higher percentages of sales in these areas.
Higher Marketing Costs: Marketing expenses have increased, contributing to higher overall costs as a percentage of sales. This could strain profitability if not offset by increased revenue.
Litigation Accruals: General and administrative expenses include 30 basis points in litigation accruals, which adds to the financial burden and could impact net income.
Operating Loss: The company reported an operating loss of $3.7 million, up from $1.5 million in the prior year quarter, largely due to tariff pressures and increased costs. This indicates financial strain and reduced profitability.
Net Loss: Net loss for the quarter was $3.1 million, compared to $1 million in the prior year quarter. This worsening financial performance could impact investor confidence and the company's ability to fund future growth.
Revenue Expectations: Total sales for fiscal year 2026 are expected to be between $330 million and $334 million.
Unit Growth: The company plans to open 16 new units in fiscal year 2026, maintaining an annual unit growth rate above 20%.
Capital Expenditures: Average net capital expenditures per unit are expected to approximate $2.5 million.
Cost of Goods Sold (COGS): Full year COGS is expected to be around 30%, considering the impact of tariffs and menu price adjustments.
Labor Costs: Labor costs are expected to improve by 100 basis points in fiscal 2026.
Restaurant-Level Operating Profit Margins: Full year restaurant-level operating profit margins are expected to be approximately 18%.
General and Administrative (G&A) Expenses: G&A expenses as a percentage of sales are expected to be between 12% and 12.5%.
New Market Expansion: The company plans to enter new markets with restaurant openings in Tulsa and Charlotte.
Technological Advancements: Robotic dishwashers are expected to be installed in Q3, with the majority of 50 eligible existing restaurants retrofitted by the end of the fiscal year.
The selected topic was not discussed during the call.
The earnings call reveals mixed signals: increased net loss and decreased margins are negative, but the company has no debt and expects positive comps in Q2. The decoupling of the reservation system and successful promotions are positive. Tariff impacts remain a concern, though potential relief could improve costs. The strategic plan for FY26 shows growth potential, but unclear guidance on pricing and long-term growth targets tempers optimism. The overall sentiment is neutral, with no extreme catalysts to suggest significant stock price movement.
The earnings call summary shows strong financial performance with improvements in net income, operating income, and EBITDA. Despite some macro pressures, the company has a solid cash position and no debt. The Q&A section reveals positive sentiment towards strategic initiatives, like IP collaborations and new unit openings, although management's guidance is cautious due to external pressures. Given these factors, along with optimistic guidance and strategic plans, the stock price is likely to see a positive movement, especially if the market cap is small, amplifying the reaction.
The earnings call reveals strong financial performance, with reduced G&A expenses and no debt. Product development is robust, with successful new store openings and promising IP collaborations. The reservation system shows potential for further sales improvement. Despite some uncertainties like tariffs, management is optimistic, and the company maintains a strong growth trajectory. The Q&A session reinforces positive sentiment, highlighting improvements in operational efficiency and new initiatives. Overall, the positive aspects outweigh any concerns, suggesting a likely positive stock price movement.
The earnings call revealed missed earnings expectations and negative comparable sales growth, with additional pressure from inclement weather and tariff uncertainties. Despite some positive operational updates and a share repurchase program, the overall sentiment remains negative due to financial underperformance and market expansion risks. The Q&A highlighted management's uncertainty regarding tariffs and supply chain impacts, further contributing to a negative outlook. Given these factors, the stock price is likely to experience a negative movement in the coming weeks.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
