How did Flanigan's revenue and expenses trend in Q1 2025?

**Flanigan's revenue showed improvement in Q1 2025, but expenses posed a challenge to profitability.**

1. **Revenue Improvement**: The company's total revenues increased to $50.26 million for the quarter ended December 28, 2024, reflecting a notable 11.3% rise from $45.14 million in the same period the previous year. This growth was primarily driven by higher restaurant and package store sales, which benefited from menu price increases and improved customer traffic.
2. **Expense Challenges**: Despite the revenue growth, net income attributable to Flanigan's Enterprises declined by 49.5% to $55,000 from $109,000, primarily due to rising food and labor costs, as well as increased selling, general, and administrative (SG&A) expenses. Payroll and related costs jumped by 9.5% to $15.7 million from $14.4 million, largely attributed to wage inflation and the operational costs of new store openings.
3. **Cash Flow Dynamics**: The company's cash provided by operating activities more than doubled to $7.7 million from $3.5 million, a significant improvement attributed to the timing of accrued expense payments. Capital expenditures for the quarter totaled $0.7 million, marking a 45.9% decrease from $1.4 million, mainly focused on restaurant refurbishments.
4. **Stock Performance Context**: Flanigan's stock has shown resilience with a 1.2% gain since the Q1 earnings report, outperforming the S&P 500 Index’s 0.7% gain over the same time frame. This indicates investor confidence in the company's revenue growth despite the decline in profitability.

In conclusion, while Flanigan's has seen a positive revenue trend driven by sales growth, the rising costs and expenses have put pressure on profitability, resulting in a decline in net income. The company's strategic focus on cost management and operational efficiency will be crucial in maintaining profitability as the business continues to grow.