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Ark Restaurants Corp. (ARKR)
F3Q08 Earnings Call
August 11, 2008 10:00 am ET
Robert Towers - President, Chief Operating Officer, Treasurer, Director
Michael Weinstein - Chairman of the Board, Chief Executive Officer
Blaine Marter - Lead Partners
Paul Taylor - Taylor Business Services
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Thanks, Mitch. Good morning and thank you for joining us on our conference call for the third fiscal quarter and nine months ended June 28, 2008. With me today on the call are Michael Weinstein, our Chief Executive Officer; Vincent Pascal, our Senior Vice President and Director; and Michael Buck, our General Counsel. For those of you who have not yet obtained a copy of our press release, it was issued over the newswire on Friday after the close of business and it is available on our website. To view it, you can just go to www.arkrestaurants.com.
Before we begin, however, I would like to read the Safe Harbor statement. I need to remind everyone that part of our discussion this morning will include forward-looking statements and that these statements are not guarantees of future performance and therefore, undue reliance should not be placed upon them. We refer all of you to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on our operating results, performance, and financial condition.
I will now turn the call over to Michael Weinstein, our Chief Executive Officer, who has some comments.
Hi, everybody. This was a fairly good quarter, especially good given conditions. The two things we are constantly fighting here are obviously food costs and comp sales. The comp sales were basically flat for the quarter. We have some challenges right now that are in specific venues. We are doing well in New York, which is probably helped a little bit by tourism, and I’m going to give you updated comps in a few seconds. We’re doing fairly well in Washington, D.C. We are doing badly in New Jersey. We’re in of course the casino there and Atlantic City is doing badly, both because of competition from Pennsylvania Slots as well as gas prices, I would imagine it’s affecting Atlantic City.
We’re actually doing pretty well in two of our venues in Connecticut at Foxwoods Casino, and we are slower than we would like to be at the new MGM Grand in Connecticut at Foxwoods Casino but we are profitable there. We opened that just about five or six weeks ago and those numbers in my opinion, [our product] is good in terms of the whole casino and we have the exclusive on fast food there, so I think we are doing decent given the -- that that’s a destination place also affected greatly by gas prices.
In Las Vegas, we are doing well, despite all you hear about Las Vegas, and we are doing particularly well because our largest venue at New York New York Hotel and Casino, and that casino floor is under renovation. And when I say renovation, there are days when you can’t even see our fast food because there are these black curtains dividing it from the casino floor, there’s jack-hammering going on and what’s really occurred is for the last few months and until the end of September, we are going to be basically in a construction site. So I think we are doing very well there.
Our numbers in Venetian are strong. Just to give you an idea, for the four weeks just ended in July, we are up pretty much, you know, let’s see -- we’re up 2%. We’re flat in Las Vegas, New York we’re up 16%, Atlantic City we’re down 20%, Washington, D.C. we’re up a point, Connecticut is hard to compare because of the MGM is a new facility. Boston we’re up 4% so we’re up 2%. In Florida we’re up about 3.5%, 4% for the last four weeks. So our comp sales, while challenged, held up pretty well.
We have said in the past that we have raised prices selectively on some of these menus where we have good demand. We are not raising prices where demand is soft and the price increases we are getting are something on the order of 1.5%, 2%. We are not in the process right now of raising anymore prices. We’re trying to hold our customers and we just would rather take that approach than try to keep up with the increased food costs.
That’s the real challenge. I think our managers and chefs and buying departments in all venues are doing a good job. The bump in costs for the year so far is about 0.5% and for the quarter as well.
So all in all, I think it’s pretty good. We’re controlling operating costs and expenses very well, G&A expenses we’re controlling pretty well. You know, the company is on sound footing. I would tell you that in my opinion, given the inventory that we have right now, the operations we are running, I think we are probably in the best shape we’ve ever been in terms of where these restaurants are. A lot are mature facilities, they are running well. Our newer facilities are on good track. Boston over the last year, we’ve made significant, significant improvements in the cost structure there. It was a restaurant we bought a little over a year ago and this -- so far for the fourth quarter we’re up 7% there.