Flanigan's Stock Declines Post Q1 Earnings Despite Sales Growth

Shares of Flanigan's Enterprises, Inc. BDL have lost 0.9% since the company reported its earnings for the quarter ended Dec. 27, 2025. This compares with the S&P 500 Index’s 1.7% decline over the same time frame. Over the past month, the stock slipped 0.2%, while the broader index fell 1.9%.

BDL’s Earnings Snapshot

For the 13 weeks ended Dec. 27, 2025, total revenues rose 5.1% year over year to $52.6 million from $49.9 million in the prior-year period. Net income attributable to Flanigan’s surged to $0.9 million, or $0.43 per share, from $55,000, or $0.03 per share, a year earlier. The sharp improvement in earnings reflects higher sales and improved operating leverage. At the operating level, income from operations jumped 121.9% year over year to $1.7 million from $0.8 million in the prior-year quarter.

On a segment basis, restaurant food sales increased 6.2% year over year to $30.9 million from $29.1 million, driven by price increases and higher traffic, according to management’s discussion. Restaurant bar sales edged down 1.3% year over year to $7.85 million from $7.96 million, reflecting softer alcohol consumption trends. Package store sales rose 6.8% year over year to $13.3 million from $12.4 million, supported by increased store traffic and e-commerce activity. Franchise-related revenues were up 1.6% at $438,000 from $431,000 a year ago.

Flanigan's Other Key Business Metrics

Gross profit improved across both core segments. Restaurant food and bar gross profit rose 7.4% year over year to $25.8 million from $24.1 million, with margin expanding to 66.6% from 64.9%, benefiting from recent menu price increases and certain lower food costs. Package store gross profit increased 12.4% year over year to $3.3 million from $2.9 million, with margin widening to 24.9% from 23.8%.

Total costs and expenses increased 3.4% year over year to $50.9 million from $49.2 million, but declined as a percentage of revenue to 96.8% from 98.5%, reflecting operating leverage. Payroll and related costs rose 3.9% year over year to $16.4 million from $15.7 million, primarily due to increases in the Florida minimum wage. Operating expenses climbed 7.4% year over year to $6.9 million from $6.5 million amid inflationary pressures, while occupancy costs increased 8.4% year over year to $2 million from $1.9 million. Selling, general and administrative expenses declined 4.2% year over year to $1.4 million from $1.5 million.

Cash flow from operations totaled $4.9 million, down from $7.7 million in the prior year, while cash and cash equivalents increased to $22.9 million as of Dec. 27, 2025, from $20.1 million as of Sept. 27, 2025.

Flanigan's Enterprises, Inc. Price, Consensus and EPS Surprise

Flanigan's Enterprises, Inc. price-consensus-eps-surprise-chart | Flanigan's Enterprises, Inc. Quote

BDL’s Liquidity and Capital Resources

Flanigan’s reported working capital of $12.9 million at quarter-end, up from $12.5 million at the fiscal year-end. Long-term debt, including the current portion, stood at $20.3 million, down modestly from $20.6 million as of Sept. 27, 2025. During the quarter, BDL refinanced a mortgage loan without increasing principal and remains in compliance with its debt covenants.

Capital expenditures totaled $595,000 during the quarter compared with $745,000 in the year-ago period, including renovation spending at several company-owned locations.

Flanigan's Management Commentary and Drivers

Management attributed the revenue gains primarily to recent menu price increases implemented in November and December 2024 and February 2025, as well as increased restaurant and package store traffic. Comparable weekly restaurant food sales for units open during both comparable quarters increased 6.1% year over year, reflecting higher traffic and menu price adjustments. Company-owned locations posted a 7.5% gain, while affiliated limited partnership restaurants saw a 4.9% increase. In contrast, comparable weekly restaurant bar sales declined 1.3% year over year, underscoring softer alcohol consumption trends.

Inflation continues to affect food, beverage and labor costs, and supply chain challenges remain a factor. Flanigan's has sought to offset these pressures through pricing actions. Net income as a percentage of revenue improved to 2.9% from 1.3%, underscoring the benefit of higher margins and improved cost control.

BDL’s Guidance and Outlook

While Flanigan's did not provide formal earnings guidance, management indicated expectations for continued increases in restaurant food and package liquor store sales through the balance of fiscal 2026, driven by traffic trends and pricing actions. Gross margins for package liquor stores are expected to increase slightly for the remainder of the fiscal year.

Management also stated that current cash on hand and positive operating cash flow are expected to be sufficient to fund operations and planned capital expenditures over at least the next 12 months.

Flanigan's Other Developments

In the fourth quarter of fiscal 2025, BDL acquired undeveloped land in Cutler Bay, FL, for $2.2 million in cash for a future restaurant site. Subsequent to quarter-end, Flanigan’s amended and extended the lease for its Surfside, FL, location through December 2035, increasing its lease liability and right-of-use asset by approximately $2.1 million.

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