Flanigan's Enterprises-BDL Stock Gains Despite Q1 Earnings Decline, Revenues Improve Y/Y

Core Viewpoint - Flanigan's Enterprises, Inc. reported a mixed financial performance for the quarter ended December 28, 2024, with revenue growth driven by increased sales but a significant decline in net income due to rising costs [2][3][9]. Financial Performance - Total revenues reached $50.3 million, an 11.3% increase from$ 45.1 million in the same quarter last year, driven by higher restaurant and package store sales [2]. - Restaurant food and bar sales increased by 9.7% to $37.1 million, while package store sales surged 17.3% to$ 12.4 million [2]. Profitability Metrics - Net income attributable to shareholders fell 49.5% to $55,000 from$ 0.1 million a year ago, with EPS declining 50% to $0.03 from$ 0.06 [3]. - Gross profit for restaurant food and bar sales increased 9.4% to $24.1 million, while package store gross profit rose 8.5% to$ 2.9 million [4]. Cost Analysis - Payroll and related costs increased 9.5% to $15.7 million, primarily due to wage inflation and the opening of a new location [5]. - SG&A expenses climbed 25.2% to$ 1.5 million, driven by increased advertising expenditures [5]. Cash Flow and Debt - Cash and cash equivalents rose to $27.3 million from$ 21.4 million, with net cash from operating activities more than doubling to $7.7 million [6]. - Long-term debt decreased slightly to$ 21.6 million from $21.9 million [6]. Management Insights - Management attributed revenue growth to recent menu price increases, with targeted annual increases of 4.14% for food and 4.90% for bar prices [7]. - Despite revenue growth, management noted ongoing cost pressures from inflation in food, beverage, and labor [9]. Future Outlook - The company expects continued revenue growth supported by menu price increases and strong customer demand, but anticipates ongoing cost pressures [11]. - Flanigan's has entered a new Master Services Agreement to ensure stable product supply and committed to purchasing$ 7.8 million worth of baby back ribs at pre-negotiated prices [12]. Capital Expenditures - Capital expenditures for the quarter totaled $0.7 million, down 45.9% from$ 1.4 million, mainly for restaurant refurbishments [6][13].