Shares of Flanigan's Enterprises, Inc. (BDL Quick QuoteBDL - Free Report) have gained 4.1% since the company reported its earnings for the quarter ended Sept. 27, 2025. This compares to the S&P 500 Index’s 1.4% gain over the same time frame. Over the past month, the stock lost 8.9%, underperforming the broader market as the S&P 500 rose 1.5%.

BDL’s Earnings Snapshot

Flanigan’s posted higher sales and earnings in both the fiscal fourth quarter and full fiscal 2025 compared with the prior year. For fourth-quarter fiscal 2025, sales increased to $49.2 million from $46 million in the year-ago period. Net income rose to $0.9 million from $0.2 million, and diluted earnings per share (EPS) improved to $0.48 from $0.11. Diluted EPS before non-recurring items was also $0.48 compared with $0.10 a year ago.

For fiscal 2025, total revenues rose 9.6% to $205.2 million from $187.2 million, while net income attributable to stockholders increased 49.9% to $5 million ($2.71 per share) from $3.4 million ($1.81 per share) in fiscal 2024.

The fiscal-year increase was supported by growth across both operating segments. Restaurant food sales rose 8.5% to $124.5 million from $114.8 million, while restaurant bar sales increased 5.8% to $31.8 million from $30 million. Package store sales also advanced 16% to $46.9 million from $40.5 million, reflecting higher customer traffic and steady demand in the liquor retail business.

Flanigan's Other Key Business Metrics

Cost discipline and operating leverage were evident in fiscal 2025 results. Total costs and expenses increased 8.3% to $196.5 million from $181.4 million, rising at a slower pace than revenue growth and supporting an increase of 49.7% in income from operations to $8.7 million from $5.8 million.

Labor inflation remained a key pressure point. Payroll and related costs rose 7.3% to $63.7 million from $59.3 million, driven by wage increases in Florida and operating activity across the estate, including the full-year impact of the Hollywood, FL, restaurant reopening. However, payroll improved modestly as a percentage of revenue to 31.04% from 31.70%, suggesting some offset from pricing and productivity measures.

Profitability trends differed by segment. Restaurant gross margin improved to 66.6% from 65.6%, supported by menu price increases that more than offset higher input costs. In contrast, package store gross margin fell to 25.1% from 26.6%, indicating pressure from product cost increases and competitive dynamics in liquor retail.

Liquidity remained solid. Cash and cash equivalents ended fiscal 2025 at $20.1 million, down from $21.4 million, primarily due to a land acquisition for future development. Operating cash flow improved to $10.5 million from $6.6 million, reflecting stronger earnings and working-capital performance.

BDL’s Management Commentary

Management cited both pricing and traffic-related tailwinds in fiscal 2025. BDL noted that revenue increases were driven primarily by higher menu prices, increased restaurant and package store sales, and the Hollywood, FL, location operating for the full year compared with only part of fiscal 2024.

To preserve margins amid inflation, Flanigan’s implemented multiple price increases. Management stated the company raised prices on its menu and bar offerings several times during fiscal 2025, including food pricing actions effective Nov. 17, 2024, and bar pricing actions effective Dec. 4, 2024, and Feb. 23, 2025.

Factors Influencing Flanigan's Headline Numbers

Inflation was described as a meaningful driver of expense levels. Management said inflation has affected food, beverage, fuel and labor costs and has had a material impact on operating results.

BDL also highlighted cost-control initiatives aimed at reducing and managing expenses, which helped keep total cost growth below the pace of revenue expansion during fiscal 2025.

BDL’s Guidance

Flanigan’s did not provide formal numeric guidance for fiscal 2026, but it outlined directional expectations. Management expects restaurant food and bar sales to increase due to stronger traffic, and anticipates further growth in package liquor store sales tied to increased traffic. However, management also cautioned that operating costs and expenses are expected to continue rising through fiscal 2026, and it expects package liquor store gross margin to decline due to higher costs and reduced pricing on certain items to remain competitive.

Flanigan's Other Developments

During fiscal 2025, Flanigan’s purchased vacant real property in Cutler Bay, FL, for $2.2 million in cash and plans to construct a 6,400-square-foot building to lease to a limited partnership that would operate a future Flanigan’s restaurant. After the fiscal year-end, the company refinanced a mortgage loan tied to its Calusa Center property in Miami, keeping the principal unchanged at $5.7 million and shifting the interest rate structure to a floating-rate formula based on Term SOFR plus 2.25%.

Operationally, Flanigan’s continued enhancing its infrastructure and long-term supply visibility. The implementation of Oracle NetSuite to replace the general ledger system was completed and functional at the start of the fourth quarter of fiscal 2025. The company also disclosed a new supply commitment for baby back ribs, agreeing to purchase approximately $9.2 million of ribs during calendar year 2026, up from a $7.8 million agreement for calendar year 2025, reflecting higher market pricing and increased quantity ordered.