Shares of Flanigan's Enterprises, Inc. (BDL Quick QuoteBDL - Free Report) have seen notable gains since the company released its latest quarterly results. Since the earnings announcement covering the quarter ended March 29, 2025, the stock has appreciated 19.1%, significantly outpacing the S&P 500 Index, which declined 1.9% in the same period. Over the past month alone, BDL has risen 13.8%, beating the S&P 500’s 6.4% increase.

Flanigan's Earnings Snapshot

For the 13 weeks ended March 29, 2025, Flanigan’s reported total revenues of $53.6 million, marking an 11.6% increase from $48.1 million a year ago. Net income attributable to BDL stockholders rose 38.5%, reaching $2.7 million from $1.9 million. This translated into earnings of $1.45 per diluted share, up 39.4% from $1.04 in the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Segment-wise, restaurant food and bar sales combined climbed to $40.8 million, a 9.9% rise from $37.1 million in the same quarter last year. Package store sales surged 18.8%, reaching $12.1 million from $10.1 million. The company attributed these gains to higher customer traffic and recently implemented menu price increases to offset rising input costs.

BDL’s Operational Efficiencies and Strategic Pricing Drive Profitability

Gross profit from restaurant and bar operations increased 10.2% to $27.4 million from $24.9 million, while package store gross profit rose 27.7% to $3.4 million from $2.6 million, reflecting higher profit margins across the board. The gross profit margin for restaurant food and bar sales increased to 67.23% for the 13 weeks ended March 29, 2025, from 67.09% for the 13 weeks ended March 30, 2024, primarily due to the recent price increases. The gross profit margin for package store sales was 28.06% for the same period compared with 26.11%.

Flanigan’s attributed the margin expansion to targeted menu price increases in November 2024, December 2024 and February 2025, designed to counter inflationary pressures on food, labor and liquor costs. For instance, bar prices were raised by approximately 5.63% in August 2024, 4.90% in December and an additional 0.84% in February 2025, while food prices saw a 4.14% increase in November 2024.

At the segment level, restaurant operations generated $4.7 million in operating income, up 18.6% from $4 million a year earlier, while the package store segment posted $1.3 million, up 67.1% from $0.8 million.

Flanigan's Management Commentary

According to management’s discussion and analysis, the revenue boost was partially fueled by the March 2024 opening of a new company-owned restaurant in Hollywood, FL. This unit contributed fresh revenues while leveraging existing operational infrastructure.

BDL also commented on improving comparable sales. For example, comparable weekly restaurant food sales for restaurants rose 5.9%, with company-owned restaurants specifically seeing an 8.1% increase. Comparable weekly restaurant food sales for affiliated limited partnership-owned restaurants only were $1.2 million for the 13 weeks ended March 29, 2025, up 3.9% year over year. The weekly average of same-store package liquor store sales, which includes 11 company-owned package liquor stores, was $0.9 million for the 13 weeks ended March 29, 2025, up 18.9% year over year.

Flanigan’s anticipates continued revenue growth throughout the remainder of fiscal 2025, primarily driven by the full-year impact of these price adjustments and stable demand across both restaurants and retail liquor outlets.

Headwinds and Cost Management Initiatives by BDL

Despite top-line gains, the company noted that inflation remains a headwind, impacting food, beverage, and labor costs. Payroll and related costs increased 8.1% to $16.2 million from $14.9 million due to higher minimum wages and staffing at the new Hollywood location. Nevertheless, as a percentage of revenue, payroll expenses declined 30.2% year over year from 31.1%, reflecting improved labor efficiency.

Operating expenses, occupancy costs, and depreciation also trended higher, mainly due to the recent store opening and general cost inflation. However, management implemented cost containment strategies to help offset these pressures, resulting in a slight decrease in overall costs as a percentage of total revenues, from 94.4% to 93.2%.

Flanigan's Guidance

Flanigan's did not provide any formal earnings or revenue guidance for the upcoming quarters. However, it noted that recent pricing actions and operational expansion would continue to influence its performance positively through the remainder of the fiscal year.

BDL’s Other Developments

During the quarter, Flanigan’s made no acquisitions or divestitures. However, it invested $1.73 million in capital expenditures during the 26 weeks ended March 29, 2025, with renovations at multiple company-owned and limited partnership locations. The company also entered a new purchase agreement for baby back ribs, valued at approximately $7.8 million for calendar year 2025, to ensure supply and lock in competitive pricing.

Flanigan’s remains in compliance with all loan covenants and reported a healthy liquidity position, ending the quarter with $22.9 million in cash as of March 29, 2025, up from $21.4 million as of Sept. 28, 2024. No dividends were declared, and BDL still has authorization to repurchase up to 65,414 shares under a 2007 board-approved program.