ARK Restaurants Corp. (ARKR) - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the 13-week period ended December 27, 2025 (Fiscal Q1 2026). Ark Restaurants Corp. operates 16 restaurants and bars, 12 fast food concepts, and catering operations exclusively in the United States. The company operates as a single reporting segment. As of February 6, 2026, there were 3,606,157 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q1 2026 (13 Weeks) | Q1 2025 (13 Weeks) |
|---|---|---|
| Total Revenues | $40.7 million | $45.0 million |
| Operating Income | $1.1 million | $5.7 million |
| Net Income (Consolidated) | $1.1 million | $5.1 million |
| Net Income Attributable to ARKR | $0.9 million | $3.2 million |
| Diluted EPS | $0.25 | $0.88 |
| Cash and Equivalents (End of Period) | $9.1 million | $13.1 million |
| Total Debt (Notes Payable) | $3.0 million | $3.6 million |
| Working Capital | ($5.0 million) Deficit | ($5.4 million) Deficit |
Margins: Food and beverage cost of sales was 26.2% of revenue (down from 26.9% prior year). Payroll expenses were 34.9% of revenue (down from 36.5%).
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased 9.4% year-over-year. Same-store sales declined 7.3% company-wide.
- Operating Income Drop: Reported operating income fell 80.8% to $1.1 million. This decline is largely due to the absence of a $5.2 million one-time gain on the termination of the Tampa Food Court lease recorded in the prior year.
- Adjusted Performance: Excluding the prior year's one-time gain and a $146,000 loss on the closure of El Rio Grande, adjusted operating income increased 82.2% to $1.1 million from $0.6 million.
- Regional Sales: New York same-store sales dropped 14.7% primarily due to negative publicity surrounding the Bryant Park lease dispute. Las Vegas sales fell 6.4% due to renovations and lower visitor counts. Washington, D.C. sales increased 5.0%.
- Cash Flow: Net cash used in operating activities improved to $0.6 million (from $1.3 million used). Net cash used in investing activities was $0.9 million, compared to $4.9 million provided in the prior year (which included the Tampa lease termination payment).
Guidance, Outlook, Risks, and Contingencies
Bryant Park Lease Dispute (Critical Risk): The Company's leases for Bryant Park Grill & Cafe and The Porch at Bryant Park expired in March/April 2025. The landlord selected a new operator, but the Company is litigating to enforce its right of first lease. These locations represented 19.5% of Q1 2026 revenue. The Company continues to operate the premises under a "notice to quit" while the lawsuit proceeds. Management states the uncertainty has had a material adverse impact on the business.
New Meadowlands Racetrack (NMR) Investment: The Company holds a 7.4% effective interest in NMR. NMR is pursuing a constitutional amendment for a casino license, with a potential referendum in November 2026. If the referendum fails or is not held, the investment may be subject to substantial impairment. No impairment was recorded in Q1 2026.
Capital Resources: The Company has a $20 million credit facility with Bank Hapoalim B.M., extended to June 2028. No advances were outstanding under the facility as of December 27, 2025. Management believes existing cash and facilities are sufficient for the next 12 months.
Other Developments: The Company sold one condominium unit at Island Beach Resort for a $128,000 gain. Renovations at Las Vegas properties (America and Village Eateries) are ongoing with substantial completion expected by June 2026.
Investor Verification Checklist
- Bryant Park Litigation Status: Verify the timeline for the summary judgment motion (scheduled for March 12, 2026) and the potential financial impact of losing the lease for these high-revenue locations.
- NMR Casino Referendum: Monitor the New Jersey legislative process for the casino amendment and the likelihood of a November 2026 ballot measure, which dictates the valuation of the $6.7 million NMR investment.
- Same-Store Sales Trends: Assess whether the 14.7% decline in New York sales stabilizes or worsens as the legal dispute continues.
- Debt Covenants: Confirm compliance with the increased minimum tangible net worth covenant ($28 million) under the amended credit agreement.
- Seasonality: Note that Q2 (Jan-Mar) is historically the poorest performing quarter due to cold weather in NY/DC, though Florida locations provide some offset.