ARKR Plunges 31.8% in Six Months: Time to Hold the Stock or Sell?

Ark Restaurants Corp.’s ARKR investors have been experiencing some short-term losses from the stock lately, despite its bumpy ride over recent months. Shares of the owners and operators of restaurants and bars, fast food concepts and catering operations have lost 31.8% in the past six months compared with the industry’s 5.1% decline. It has also underperformed the sector and the S&P 500’s gains of 6% and 16.3%, respectively, in the same time frame.

A key recent development for ARKR was the release of its fourth-quarter fiscal 2025 results on Monday. The company reported weaker top-line performance and continued losses for the quarter and full year, reflecting softer traffic at certain flagship locations and significant disruption tied to ongoing litigation at Bryant Park. While several properties delivered improved cash flow and operational gains — particularly in Las Vegas and select New York and Florida restaurants — these positives were outweighed by lower catering and a la carte sales, as well as the absence of revenue from closed or exited locations.

Ark Restaurants’ management attributed much of the earnings pressure to elevated legal costs and business uncertainty surrounding the Bryant Park Grill and The Porch at Bryant Park, which continued to dampen event bookings and overall revenue visibility. At the same time, executives highlighted improving efficiency across much of the portfolio and noted stronger cash flow trends at the New York-New York Hotel & Casino in Las Vegas, Robert in New York City, and the Rustic Inn in Florida. Despite ongoing inflation in labor, insurance and operating expenses, ARKR emphasized its solid balance sheet and remains focused on stabilizing core operations while pursuing longer-term growth opportunities.

ARKR’s Six Months Price Comparison

Over the past six months, the stock’s performance has remained weak, underperforming its peers like Flanigan's Enterprises, Inc. BDL and Nathan's Famous, Inc. NATH. Flanigan's and Nathan's Famous’ shares have lost 0.1% and 12.7%, respectively, in the same time frame.

Ark Restaurants did not issue formal guidance or provide a quantified outlook. However, management shared a cautious, qualitative view, noting improved operating trends entering the December quarter. They highlighted better efficiency and stronger cash flow at several locations, including properties in Las Vegas and select New York markets. However, uncertainty tied to the Bryant Park litigation continues to weigh on event bookings and visibility. Cost inflation remains a challenge, though pricing actions are expected to help partially offset higher expenses.

Ark Restaurants operates 17 restaurants and bars, 16 fast food concepts and catering operations exclusively in the United States, located in New York City, Washington, D.C., Las Vegas, NV, Atlantic City, NJ, the east coast of Florida and the Gulf Coast of Alabama.

Challenges Ahead for Ark Restaurants

ARKR stock continues to face pressure from ongoing uncertainty tied to its Bryant Park operations, which management described as a significant drag on performance. Elevated legal expenses and disruption surrounding the Bryant Park Grill and The Porch have reduced event bookings and created uneven revenue visibility. While corporate events have started to return and are generating positive cash flow, management acknowledged that the situation remains a key source of uncertainty and cost pressure.

Another factor weighing on Ark Restaurants is mixed performance across the restaurant portfolio, particularly softness in certain markets. Management cited weaker trends in Washington, D.C., where reduced office traffic has hurt lunch and after-work dining, as well as pressure in parts of Florida following unusually strong prior-year demand. These declines have offset stronger results at select locations, including Las Vegas and Robert in New York, limiting overall momentum.

Persistent cost inflation remains a headwind. ARKR continues to contend with higher labor, insurance and operating expenses, which have constrained margins despite targeted pricing actions. Management noted that while pricing and efficiency initiatives have helped, inflationary pressures continue to weigh on profitability and investor sentiment.

ARKR’s Strong Fundamentals Weigh In

Two fundamental factors are driving Ark Restaurants’ stock. One is the potential long-term optionality tied to the Meadowlands Racetrack investment, where management reiterated that ARKR would gain exclusive food-and-beverage rights if casino gaming is approved, creating meaningful upside despite uncertainty around timing and regulatory outcomes. The second factor is improving operational efficiency at select core properties, particularly in Las Vegas and at Robert in New York, where stronger cash flow and cost controls have helped offset softer demand in Florida and ongoing legal-related pressures elsewhere.

Ark Restaurants’ Stock’s Valuation

Ark Restaurants’ trailing 12-month EV/Sales of 0.08X is lower than the industry’s average of 4.17X and its five-year median of 0.28X.

Flanigan's and Nathan’s Famous’ trailing 12-month EV/Sales currently stand at 0.28X and 2.63X, respectively, in the same time frame.

Our Final Take on ARKR

Ark Restaurants faces a more mixed operating backdrop, with ongoing legal uncertainty at Bryant Park and uneven demand across certain markets continuing to weigh on near-term visibility. However, improving efficiency and cash flow at select core properties, along with long-term optionality tied to the Meadowlands Racetrack investment, provide some fundamental support. Given these crosscurrents, the stock appears best suited for investors with a higher risk tolerance who are willing to wait for a clearer resolution of key issues. Existing shareholders may find it prudent to hold the stock while monitoring developments, whereas new investors may prefer to remain on the sidelines until greater operational and legal clarity emerges.

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This article originally published on Zacks Investment Research (zacks.com).

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