Los Angeles, May 21, 2019 (GLOBE NEWSWIRE) -- Giggles N’ Hugs, Inc. (OTCQB: GIGL), owner and operator of family-friendly restaurants that bring together high-end, organic food with active, cutting-edge play and entertainment for children, announces record results for its quarter ended March 31, 2019.
First Quarter 2019 Highlights:
- Net sales up 14% to a record $699,226
- Record store-level profits of $152,990 up over 360% from $41,750 in the prior year period
- Record store-level margins of 21.9%, up over 320% from 6.8% in the prior year period
- Approaching breakeven; Net loss decreased 47% to $127906
“It was a huge quarter for us anyway you measure it, and we feel we owe it to both the weather and our proven and unique concept,” stated Joey Parsi, Founder and co-CEO of Giggle N’ Hugs. With net sales up an impressive 14% versus the prior year, we are excited about the future. On the store level, we achieved over $150k in store-level profits, or EBITDA, up over 360%, as compared to prior year period, a record and a milestone for the company. Below is a more detailed break out of the revenue and expenses, between store level and corporate, showing that the Company achieved historic and record store level margins of 21.9%, up over 320% compared to 6.8% in the prior year period, getting us closer to break even, even after absorbing corporate and overhead costs.”
| Condensed Consolidated Statement of Operations | |||||||||||||||||
| Thirteen Weeks Ended March 31, 2019 | |||||||||||||||||
| Year to Date | |||||||||||||||||
| Current | Prior Year | Var (+/-) | |||||||||||||||
| Description | $$ | % | $$ | % | $$ | ||||||||||||
| Total Net Sales - Restaurant | 699,226 | 100.0 | % | 613,363 | 100.0 | % | 85,863 | ||||||||||
| Total COGS | 106,871 | 15.3 | % | 105,738 | 17.2 | % | (1,132 | ) | |||||||||
| Total Payroll Costs | 232,831 | 33.3 | % | 251,669 | 41.0 | % | 18,838 | ||||||||||
| GROSS PROFIT | 359,525 | 51.4 | % | 255,956 | 41.7 | % | 103,569 | ||||||||||
| RESTAURANT OPERATIONS EXPENSES | 115,746 | 16.6 | % | 127,179 | 20.7 | % | |||||||||||
| CONTROLLABLE PROFIT | 243,779 | 34.9 | % | 128,777 | 21.0 | % | 115,002 | ||||||||||
| Total Occupancy | 90,789 | 13.0 | % | 87,027 | 14.2 | % | (3,762 | ) | |||||||||
| EBITDA (4-wall) | 152,990 | 21.9 | % | 41,750 | 6.8 | % | 111,240 | ||||||||||
| Corporate Overhead | 218,213 | 31.2 | % | 206,291 | 33.6 | % | (11,922 | ) | |||||||||
| EBITDA (w/Fees & Corp) | (65,223 | ) | -9.3 | % | (164,541 | ) | -26.8 | % | 99,319 | ||||||||
| Total Interest and loss on settlement | 10,437 | 1.5 | % | 15,390 | 2.5 | % | 4,953 | ||||||||||
| Depreciation and amortization | 52,247 | 7.5 | % | 61,634 | 10.0 | % | 9,387 | ||||||||||
| NET LOSS | (127,907 | ) | -18.3 | % | (241,565 | ) | -39.4 | % | 113,659 | ||||||||
“As stated previously, the weather is one of the biggest factors for our business and given that we had one of the rainiest winters on record here in Los Angeles, this drove our customers indoors to Giggles N’ Hugs, substantially increasing sales and profitability to record levels.”
Party bookings represent more than 50% of Giggles N’ Hugs total annual sales. Higher than average precipitation during the quarter drove increased regular restaurant sales and significantly boosted birthday party bookings as customers chose to host a variety of different events indoors at Giggles N Hugs rather than at home or at the park.
“We are thrilled to be able to finally show the market clearly in black and white why it’s so beneficial for us to be in markets where the weather is more extreme,” continued Parsi. “This is why we are looking at cities like Seattle, San Francisco, and Portland for our next locations.”
“Although successful in southern California, as evident by our record Q1 results, which were mainly due to the rainy winter we experienced this year, validate our belief that if we operated in markets with more extreme weather, we will be able to achieve significantly higher sales and profits as compared to prior results.”
“We continue to explore opportunities to secure growth capital,” said Parsi. “As discussed on our last investor call, we’re also working with a top business broker to help find an investment group to bring in capital and or to find us potential synergistic acquisition targets. While we have looked at several opportunities, which include, other kids related party venues, entertainment centers, and catering companies, we have no news to report at this time, although we are in active discussions with a couple of them that look promising.”
Communications with landlords about new opportunities remain ongoing but we need to shore up our balance sheet before we can sign new deals. Giggles N’ Hugs has proven its ability to drive significant foot traffic to malls with an estimated 12,000 monthly visitors at each of the Company’s locations. This foot traffic is what all the major landlords are yearning for and is one of the reasons they love the unique Giggles N’ Hugs concept.
“ We have pioneered and proven one of the most unique concepts in the restaurant world, relationships with the biggest mall owners in the country providing ample new locations to choose from, a seasoned management team, significant press in the media, A-list celebrity customers, and now record sales and Store-level profits which we believe will result in significant shareholder value, Parsi concluded. ”
“With the exception of growth capital, which we are very focused on and look to remedy, we believe we have put in place all the pieces of the puzzle and have laid the foundation for the company to grow rapidly,” said Philip Gay, co CEO. “We appreciate the continued support of our current shareholders and we welcome any new investors who sees the potential and value of this unique concept. We recognize the challenges that lay ahead and remain committed to exploring every option to succeed and achieve our growth objectives. The bottom line is that we need capital to grow but with the success we’ve seen at the store level, with year-over-year record sales increases, record profitability, record margins, lowest SG&A in our history, the rave reviews we’ve received from customers, the coverage we’ve garnered in the media, the foot traffic we bring to malls, the uniqueness of the concept, and more, we remain highly optimistic for the future", Gay concluded.
About Giggles N’ Hugs
Giggles N' Hugs is the first and only restaurant that brings together high-end, organic food with active, cutting-edge play and entertainment for children. Every Giggles N' Hugs location offers an upscale, family-friendly atmosphere with a dedicated play area that children 10 and younger absolutely love. We feature high-quality menus made from fresh and local foods, nightly entertainment such as magic shows, concerts, puppet shows and face painting, and hugely popular party packages for families that want to do something special.
Forward Looking Statements:
Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation those set forth in the Company's filings with the Securities and Exchange Commission (the "SEC"). Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.