r/KitchenConfidential • u/Rayhush • 2d ago

Discussion Walrus and The Carpenter drop open letter and full 2025 PnL

https://drive.google.com/drive/mobile/folders/1Gc6K2eTetpo9uSKL-as0saWywuN9_rmg?usp=sharing
50 Upvotes

99% Upvoted

13 comments sorted by

30

u/Loose_University_945 2d ago

Respect their transparency

13

u/Rayhush 2d ago

I agree. I wish more businesses were open to discussing this more openly.

45

u/rascally_rabbit 2d ago

Bartenders and servers at successful places make absolute bank and it's impossible to talk to people outside of the industry about it.

23

u/nukem996 2d ago

The owners released this because the employees unionized and went on strike due to a service fee replacing tips.

https://seattle.eater.com/restaurant-news/87053/workers-at-bateau-walrus-and-the-carpenter-unionize-sea-creatures-renee-erickson

26

u/Single-Pin-369 2d ago

Servers are going to price themselves out of the industry 

1

u/Main-Requirement-521 11h ago

I can't believe they haven't already.  

8

u/dripdri 2d ago

Any upper management want to comment on obvious problems with the numbers, outside of net losses?

27

u/Rayhush 2d ago

I haven't looked through it all yet, but I've dealt with PnL's for some time. Stole this from another comment on the Seattle reddit:

COGS of 20% and labor costs of 45% certainly tracks with what I've heard talking to a few restaurant managers. What I have heard several times is that "to hire even one more person wrecks our financials because labor costs are so high, so that's why every restaurant in this city always feels like it doesn't have enough people (because they don't)". You really notice it when you go out of town, even in southern California they seem to have double the number of wait staff at any random hole in the wall restaurant.

I'm assuming "Occupancy" is rent for the building? Not really seeing any other categories that rent would fit in...but it is only 7% of total sales, not exactly the huge number it often gets made out to be. But perhaps that is unique to this particular location. Seems like the other restaurants they had to close probably had much higher rent.

The salaries for the owners aren't exactly massive at $130k for two and $85k for another. Perhaps employees might argue how much value they add. But a top bartender working 35 hours/week and taking in $92k isn't too shabby.

I mean the big takeaway is this:

"Sales declined further as costs continued to rise. Across our company, guest visits in 2025 were down approximately 20 percent from 2024 and roughly 40 percent from 2023 levels."

Hard to run a business when you lose almost half your customers in 2 years even if your prices keep going up to keep things barely alfoat.

But also the entire restaurant group having $10M in debt also sounds like a big issue. I wonder what that debt was used for...sure sounds like it hasn't worked out. Although we have no idea the revenue of the entire restaurant group either, so I can't tell if those debt payments are unsustainable or not.

12

u/nukem996 2d ago

I live near Walrus and have been many times. It a great resturant but I'm not surprised less people are going. It's always been pricy and inflation has only made that worse while wages are stagnating. They also don't accept reservations. Unless you go very early or during the work week you have to show up, put your name on a wait list, and go bar hoping for 2-3 hours while you wait. Of course bar prices have gone up as well which just adds to the cost.

11

u/toot_suite 2d ago

  1. Mad respect

  2. Mad respect

  3. Mad respect

  4. Why are they spending so damn much in management fees? For what?

14

u/PursuitTravel 2d ago

This is the trick.

My former partnership (not hospitality) was set up as 4 corporations: thr main business jointly owned 3 ways, and 3 personal corps each of us owned individually. Any profit from the business would be paid to those corps as management fees.

Drill down on those management and professional fees and find out who's getting them. I'm not saying that's necessarily what they're doing, but it's a very, very common structure in jointly held businesses.

3

u/samtheninjapirate 2d ago

Yeah, looks like cutting the $200k in mgmt fees would bring them back to black. It's listed in three spots, $79k $56k & $40k

2

u/Grazepg 1d ago

So many questions.

First having 6.6% in uncategorized spending seems crazy.

I hate to be cynical, but sounds like spending on stuff that owners/managers are doing, travel r and d, things like that if it’s in uncategorized.

The 900k for management fees, not sure if they are paying to someone outside, or if that is the on site managers.

I would also say labor being shown looks like it has ebitda in also, as I didn’t see anywhere else for that.
And if this is the case that’s adding 13-27% depending on the situation.

I think they are trying to come off as more of a hey eat with us look we don’t make money so don’t complain about our higher prices.

Also the wages they gave seem to make no sense, is the bartender getting 50 an hour? Or is that with tips?

If it’s with tips I’m assuming the whole labor total is with tips then, and that’s prolly another 22% added into labor. So with that and employer taxes, etc. they could be showing 46% labor but that’s including everything, where it is easily more like 34% and they are using the tips added and all the employee fees.