Flanigan's Enterprises, Inc. (BDL Quick QuoteBDL - Free Report) reported earnings per share of 60 cents in the third quarter of fiscal 2024, which decreased 30.2% from the year-ago figure of 86 cents.

Revenues in Detail

Flanigan's registered revenues of $49.1 million in the fiscal third quarter, up 8.2% year over year.

The revenue uptick primarily resulted from the increased package liquor store and restaurant sales, revenue generated from the opening of Flanigan's corporate-owned restaurant in Hollywood, FL (Store #19R) in March 2024 and the opening of the limited partnership-owned restaurant in Miramar, FL (Store #25) in April 2023.

Revenue Sources

Flanigan's generates sales from three sources — Restaurant food sales, Restaurant bar sales and Package store sales.

Restaurant food sales generated revenues of $30.5 million, up 8.3% year over year. The increase is attributable to restaurant food sales generated from the opening of the company’s corporate-owned restaurant in Hollywood, FL (Store #19R) during the second quarter of fiscal 2024 and the opening of the limited partnership-owned restaurant in Miramar, FL (Store #25) during the third quarter of fiscal 2023.

Comparable weekly restaurant food sales for restaurants open for all the 13 weeks ended Jun 29, 2024, which consists of 10 restaurants owned by Flanigan's (excluding the Hollywood, FL location Store #19R), was $2.1 million, up 1.8% year over year. Comparable weekly restaurant food sales for company-owned restaurants (excluding the Hollywood, FL location Store #19R) was $0.9 million, up 2.7% year over year. Comparable weekly restaurant food sales for affiliated limited partnership-owned restaurants only (excluding the Miramar, FL location (Store #25), was $1.1 million, up 1% year over year.

Restaurant bar sales were $7.6 million in the fiscal third quarter, down 1.4% year over year. The decrease in restaurant bar sales was primarily due to increased competition and notwithstanding the opening of Flanigan's corporate-owned restaurant in Hollywood, FL (Store #19R). Comparable weekly restaurant bar sales for restaurants open for all the 13 weeks ended Jun 29, 2024, which consists of 10 restaurants owned by Flanigan's (excluding the Hollywood, FL location Store #19R) and nine restaurants owned by affiliated limited partnerships (excluding the Miramar, FL location Store #25) was $0.5 million, down 6.3% year over year. Comparable weekly restaurant bar sales for company-owned restaurants only (excluding the Hollywood, FL location Store #19R) was $0.2 million for the 13 weeks ended Jun 29, 2024, a decrease of 2.1% year over year.

Comparable weekly restaurant bar sales for affiliated limited partnership-owned restaurants only (excluding Store #25) was $0.3 million for the 13 weeks ended Jun 29, 2024, a decrease of 9.4% year over year.

Package store sales were $10.3 million in the fiscal third quarter, up 17.1% year over year. This increase was primarily on the back of increased package liquor store traffic. The weekly average of same-store package liquor store sales, which includes 11 company-owned package liquor stores, was $0.8 million for the 13 weeks ended Jun 29, 2024, an increase of 17.2% from the year-ago quarter.

Additionally, Flanigan's derives revenues from three segments — Franchise-related revenues, Rental income and Other operating income.

For the quarter under review, Franchise-related revenues were $0.4 million, down 8.2% from the year-ago quarter.

Rental income during the fiscal third quarter was $0.3 million (up 10.3% year over year), while Other operating income was $0.1 million (up 12% year over year).

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

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

Flanigan's Gross Margin

In the quarter under review, Flanigan's gross profit increased 4.4% year over year to $27.5 million. However, the gross margin contracted 217 basis points to 56.9%.

Operating Expenses Analysis

Selling, general and administrative expenses increased 29.9% year over year to $1.3 million. Operating expenses (including but not limited to utilities, insurance, cleaning, credit card fees, supplies, security, and other costs closely related to operating restaurant and package stores) increased 4.3% year over year to $6.3 million. Occupancy costs increased 5.8% year over year to $2 million.

Profitability

Operating profit totaled $2.3 million, which decreased 15.3% from the prior-year quarter.

In the fiscal third quarter, Flanigan's net income was $1.8 million, down 25.3% from the year-ago quarter. Net income attributable to Flanigan’s stockholders was $1.1 million, down 30.2% year over year.

Liquidity & Debt Management

Flanigan's exited third-quarter fiscal 2024 with cash and cash equivalents of $22.1 million compared with $22 million at the fiscal second-quarter end. Total debt at the fiscal third-quarter end was $22.2 million compared with $22.5 million at the fiscal second-quarter end.

Cumulative net cash provided by operating activities at the end of third-quarter fiscal 2024 was $5.2 million compared with $7.2 million a year ago.

Our Take

Flanigan's exited the third quarter of fiscal 2024 with solid top-line results. Robust Restaurant food sales Package store sales were also impressive. The uptick in the company’s Rental income and Other operating income was also impressive.

However, Flanigan's dismal bottom-line results and lower Restaurant bar sales were discouraging. A decline in Franchise-related revenues during the quarter was also disappointing. During the reported quarter, the gross margin contracted, which did not bode well.