Ark Restaurants Corp. Reports 5.3% Revenue Decline but Significant Increase in Operating Income

Ark Restaurants Corp. reported a decrease in revenue for the 13-week period ending December 28, 2024, with total revenues of $44.99 million, down 5.3% from $47.49 million in the same period last year. The decline was primarily attributed to a 4.7% drop in food and beverage sales, which totaled $44.44 million, and a 36.3% decrease in other revenue. Despite the revenue decline, the company achieved an operating income of $5.69 million, a significant increase of 254.9% compared to $1.60 million in the prior year, largely due to a gain of $5.24 million from the termination of the Tampa Food Court lease.

The company experienced notable operational changes during the quarter, including the closure of the El Rio Grande restaurant, which resulted in a loss of $146,000. The closure was part of a strategic decision to streamline operations, and the company recorded a total loss of $876,000 related to the lease termination in the previous fiscal year. Additionally, Ark Restaurants opened a new concept, Lucky Pig, in the Village Eateries at the New York-New York Hotel and Casino, which is part of a broader effort to refresh its restaurant offerings.

Customer engagement metrics showed a 2.3% decrease in same-store sales across the company, with significant declines in Washington, D.C. (down 18.2%) and Las Vegas (down 3.8%). The company attributed these declines to lower customer traffic and changes in consumer behavior, particularly in urban areas where hybrid work schedules have reduced lunch and after-work dining. Conversely, Alabama saw a 6.9% increase in same-store sales, indicating some regional variations in performance.

As of December 28, 2024, Ark Restaurants had cash and cash equivalents of $13.10 million and a working capital deficit of $4.26 million, an improvement from a deficit of $10.66 million a year earlier. The company’s financial position was bolstered by the cash inflow from the lease termination in Tampa. Looking ahead, Ark Restaurants is focused on managing inflationary pressures, including rising food and labor costs, while continuing to explore opportunities for geographic expansion and new restaurant concepts. The company remains cautious about the potential impact of economic conditions on its operations and profitability in the upcoming quarters.