Shares of Ark Restaurants Corp. (ARKR Quick QuoteARKR - Free Report) have lost 10.9% since the company reported results for the quarter ended March 28, 2026, underperforming the S&P 500 Index’s 0.01% gain during the same period. Over the past month, the stock lost 3.8% against the S&P 500’s 4.9% increase.

Ark Restaurants’ Earnings Snapshot

Ark Restaurants reported a narrower second-quarter fiscal 2026 loss as revenue declined amid weaker customer traffic and continued uncertainty surrounding its Bryant Park leases. Net loss attributable to ARKR improved to $1.8 million, or 50 cents per share, from $9.3 million, or $2.57 per share, in the year-ago quarter. Total revenues fell 7.9% year over year to $36.6 million from $39.7 million, while same-store sales declined 7.6%.

Food and beverage sales dropped 7.6% to $36.1 million from $39.1 million. By region, same-store sales in New York decreased 12.3%, Washington, D.C. fell 18.7%, Las Vegas declined 6.6%, Florida dropped 8.3% and Atlantic City slid 10.8%, while Alabama posted a 2.1% increase.

Sales Pressure Persists Across ARKR’s Key Markets

Management said consumer spending softness continued to weigh on traffic trends across most operating regions. Chairman and CEO Michael Weinstein noted on the earnings call that menu pricing remained largely stable, but Ark Restaurants continued losing lower-income customers pressured by higher living costs, grocery prices and fuel expenses.

ARKR attributed Las Vegas weakness largely to lower revenues at its America restaurant due to partial closures tied to renovations, while New York results were hurt by declining catered events and a la carte sales at Bryant Park Grill and Bryant Park Café amid ongoing lease litigation and unfavorable winter weather. Washington, D.C. sales suffered from lower traffic at the surrounding complex, while Florida operations faced intensified competition and softer demand.

Despite the sales decline, operating loss improved significantly to $1.7 million from $4.6 million a year earlier, helped by the absence of prior-year goodwill impairment charges. Excluding non-recurring items, adjusted operating loss narrowed year over year to $1.1 million from $1.3 million.

General and administrative expenses fell 28.7% to $2.4 million from $3.3 million, while payroll expenses declined 5.3% to $13.6 million from $14.4 million. However, occupancy expenses rose 11.5% to $6.2 million from $5.5 million, partly due to a $566,000 prepaid rent write-off tied to Bryant Park properties. Total costs and expenses dropped 13.8% from the prior-year quarter.

Adjusted EBITDA loss improved modestly to $592,000 from $691,000 in the prior-year quarter. For the first six months of fiscal 2026, adjusted EBITDA increased 36.5% to $0.9 million from $0.7 million in the comparable period in fiscal 2025.

Ark Restaurants’ Balance Sheet Remains Stable

Ark Restaurants ended the quarter with cash and cash equivalents of $11.5 million and total outstanding debt of $7.6 million. During the quarter, the company drew down $5 million under its credit facility to finance leasehold improvements in Las Vegas. Management described the balance sheet as stable and in good condition.

Operating cash usage for the first six months of fiscal 2026 totaled $1.5 million compared with cash usage of $0.7 million in the prior-year period. Capital expenditures were $2.4 million during the six-month period, largely tied to renovation projects.

ARKR’s Management Commentary and Outlook

Management said its renovated America restaurant in Las Vegas is expected to reopen in early July. Weinstein said ARKR believes the redesigned venue can evolve from a hotel-serving restaurant into a destination dining concept.

Ark Restaurants also continues to monitor developments related to New Meadowlands Racetrack LLC, where lawmakers in New Jersey are considering a constitutional amendment that could allow casino gaming at Meadowlands and Monmouth Park racetracks. Management said a favorable referendum could allow a temporary casino facility to open in early 2027, followed by a permanent venue by 2028.

Ark Restaurants did not provide formal financial guidance for the upcoming quarters.

Ark Restaurants’ Other Developments

Ark Restaurants’ litigation involving Bryant Park Grill, Bryant Park Café and The Porch at Bryant Park remains ongoing. Oral arguments on summary judgment motions are scheduled for June 16, 2026, with a pre-trial conference set for Sept. 22, 2026. Collectively, the Bryant Park properties accounted for 13.3% of total revenues during the first half of fiscal 2026, down from 15% a year earlier.

During the first six months of fiscal 2026, Ark Restaurants sold one condominium unit adjacent to its Shuckers restaurant in Jensen Beach, FL, generating proceeds of $381,000 and recording a gain of $135,000. ARKR said it intends to sell the remaining units subject to market conditions.