Unfortunately, in the aftermath of so horrific an event as Hurricane Katrina, the self-important silliness has begun. Today's headlines for Outback Steakhouse
What I don't want to do here is understate the loss or suffering that is happening in the Gulf, nor do I mean to say that there aren't economic consequences for all of us as a result of refineries being offline and stores and restaurants being damaged or destroyed. Repairs and rebuilding aren't free, and neither are funds from insurance companies and emergency funding from the government.
However, as investors, we need to consider the big picture for each company we own and put the numbers in the stories into context. To date, Outback reports that it has lost approximately $811,000 in revenues, and that five restaurants in New Orleans and two in Mississippi remain closed. (Six of these seven restaurants are Outbacks, and one is a Bonefish Grill.) In addition, 23 different restaurants experienced a temporary closure during Katrina.
When Outback says it has lost $811,000 in sales, it may sound like a large number, but it's only 0.02% of the company's total revenues for the last twelve months. That's not to say Hurricane Katrina didn't cause a problem for Outback -- two of the restaurants are closed indefinitely, and insurance won't cover all the damages or the costs of helping employees. However, all of these financial costs are still only a small percentage of Outback's business. Over the long term, they're not material.
As investors, we're much better off spending our time considering Outback's future fortunes if both Bonefish Grill and Carrabba's Italian Grill continue to be successful than dwelling on a short-term problem for a well-diversified company.
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On this week's Motley Fool Radio Show, we're talking about the aftermath of Hurricane Katrina, and we want to hear from you. Do you have some wisdom to share? Maybe you've come up with a creative way to give? We want to know about it. And here's the catch -- we don't want to talk politics because, well, that's not our show. We do want to hear from you if you've gotten some non-political post-Hurricane Katrina insight on money, business, or life. The Fool Radio phones are always open at 866-NPR-FOOL. That's 866-677-3665.