How did Ark Restaurants' revenue and expenses trend in Q1 2025?

Ark Restaurants Corp. (NASDAQ: ARKR) faced significant challenges in Q1 2025, with a notable decline in revenue and an increase in expenses, resulting in a negative net income. 1. **Revenue Decline**: The company's revenue for the 13 weeks ended December 28, 2024, was $44,988,000, which is a decrease from the $47,487,000 reported for the 13 weeks ended December 30, 2023. This decline is primarily due to the closure of the Tampa Food Court, which resulted in a loss of revenue. Excluding the revenues related to the Tampa Food Court and El Rio Grande, company-wide same-store sales decreased by 2.3% for the 13 weeks ended December 28, 2024, compared to the same period of the prior year. 2. **Expenses Increase**: Despite the revenue decline, expenses increased, primarily due to payroll and insurance premiums, which squeezed margins. The company's gross profit margin currently stands at 23.7%, indicating that the company is facing challenges in controlling its costs. The closure of the Tampa Food Court resulted in a gain of $5.2 million on the P&L, which was a positive outcome, but it was not enough to offset the overall decline in revenue and increase in expenses. 3. **Net Income**: The net income attributable to Ark Restaurants Corp. for the 13 weeks ended December 28, 2024, was $3,164,000 or $0.88 per basic and diluted share, compared to net income of $1,370,000 or $0.38 per basic and diluted share, for the 13 weeks ended December 30, 2023. This indicates a decrease in profitability, which is a direct result of the revenue decline and expense increase. 4. **Financial Health Concerns**: The company's financial health is concerning, with short-term obligations exceeding liquid assets, and a current ratio of 0.63, which suggests that the company is struggling to meet its short-term financial obligations. The company's stock also hit a 52-week low, dipping to $9.59, reflecting the market's concerns about the company's financial health and future prospects. In conclusion, Ark Restaurants experienced a decline in revenue and an increase in expenses in Q1 2025, resulting in a negative net income. The company is facing significant challenges, including the potential loss of the Bryant Park operation and the need to improve operational efficiency. The company's financial health is concerning, with short-term obligations exceeding liquid assets and a high current ratio. The company is actively seeking efficiency improvements and exploring casino licensing opportunities in New Jersey to mitigate these challenges.