Financing

Earnings roundup: Recent months prove tough for Ark, Good Times, RCI

The three multi-concept restaurant operators showed significant declines, with at least one blaming more serious consumers.
One of RCI's concepts, Rick's Cabaret. | Photo: Shutterstock

Reports continue to surface of big chains getting mightier and smaller operations struggling in the face of difficult market conditions. Here's more proof. 

Ark Restaurants posts a loss

Same-store sales for the mixed group of restaurants in Ark Restaurants’ portfolio fell 4.7% for the fourth quarter ended Sept. 30, contributing to a net loss for the company of $10.4 million last quarter.

The shortfall for the year was $5.9 million, according to the operator.

The earnings compare with net profits of $732,000 for the year-ago quarter and $11.6 million for fiscal 2022.

Revenues slipped to $44.4 million for the quarter, a year-over-year decline of 5.3%.

The losses reflected the two-month closing for renovations of the Gallagher’s Steakhouse that Ark operates in Las Vegas’ New York-New York Hotel. Profits were also eroded by a goodwill impairment charge related to the company’s huge Bryant Park Grill & Café and The Porch restaurants in New York City.  

Goodwill was reassessed in part in anticipation of a new lease being hammered out for those operations, which collectively form one of the largest dining complexes in the nation.  

Ark operates 17 full-service restaurants and 16 fast-food concepts. It also runs extensive catering operations.

Full-service market was rough for Good Times

Good Times Restaurants posted differing results for its two concepts for the fourth quarter ended Sept. 26, with company-run Good Times fast-food burger stores generating a same-store-sales gain of 2.4% while comps for full-service Bad Daddy’s Burger Bar dropped 4.9%.

Management attributed the slide at Bad Daddy’s to focusing intently on the menu and letting operations slip. “We missed the mark in the front-of-house, including at the bar,” CEO Ryan Zink said in a statement. He told financial analysts that a plan has been drafted to address Bad Daddy’s weaknesses.

The company lost $143,000 for Q4, compared to a year-ago shortfall of $1.1 million. Net income for fiscal 2023 was $11.7 million.

Adult entertainment didn’t keep profits up for RCI

Operating income for restaurant and strip-club operator RCI Hospitality Holdings fell nearly in half for the fourth quarter ended Sept. 30, with management attributing the decline to economic uncertainty and less post-pandemic celebrating.

The company did not release year-over-year same-store sales but said the Q4 tally for its Bombshells restaurant outstripped the figure for Q4 of 2019 by 12.6%.

The most recent quarter’s comparable sales for RCI’s adult nightclubs surpassed the pre-Covid measure by 8.3%. The adult entertainment centers operate under a variety of names, including Rick's Cabaret.

RCI said results for the most recent quarter reflected tough comparisons with the results of a year ago, when consumers indulged after coming out of the pandemic. Similarly, Darden Restaurants said in releasing results for its second quarter ended Nov. 26 that declines for its fine-dining group were the result of a drop in “exuberant” drinking a year ago.

Fourth-quarter operating income for Bombshells fell to $1.2 million, from a year-ago total of $2.2 million. Operating income for its adult nightclub operations totaled $12.1 million, compared with a Q4 2022 figure of $22.5 million.

Net income for the company amounted to $2.1 million, a year-over-year decline of 80%, on revenues of $75.3 million, up 5.4%.

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