No doubt about it, Landry's (NYSE:LNY) is a company in transition.

Management has a number of items on its plate these days. It's still trying to learn the gambling business after purchasing the venerable downtown Las Vegas Golden Nugget casino last year. Investors questioned why a restaurant operator would diversify into another and seemingly unrelated industry, but the move may have been a savvy decision on management's part as its food chains are struggling these days.

Last quarter, Landry's announced it was exploring strategic options for its embattled Joe's Crab Shack franchise. It found a private equity buyer on Oct. 9 and will sell 120 restaurants for approximately $192 million. The remaining stores are being rebranded to other company-owned brands or will be sold off separately. Further moves may lie ahead as the company tries to focus on its high-end seafood restaurants and steakhouses, leaving middle-of-the-road chains such as Salt Grass on the potential chopping block.

Not surprisingly, operating trends from third-quarter results released late last Thursday were hard to discern. Reported revenue was up 31.5%, mostly because of the Golden Nugget purchase, but the casino is going through a number of renovations that are holding back gaming sales.

Bottom-line trends were adversely affected by impairment charges from the Joe's Crab Shack sale and interest expense from a sizeable debt load taken on to acquire Golden Nugget. At least same-store sales were positive, growing 1%, but further restaurant details were scarce, leading certain investors to speculate that higher food costs and weaker sales trends are hurting profitability.

It will take at least another few quarters before investors can tell what the cash flow-generating capabilities of a refurbished Golden Nugget will be, and whether restaurant results stabilize. I don't see many synergies in casinos and Landry's various food brands, but maybe management has an ace up its sleeve and can successfully combine food operations with other offerings, in similar fashion to CEC Entertainment (NYSE:CEC) (food and kids' entertainment) or CBRL Group (NASDAQ:CBRL) (food and country retail stores).

Management expects to complete the Joe's Crab Shack sale by the end of this year, and the proceeds should allow management to cut debt levels. I'll wait until visibility improves before considering the company, but value investors may take interest in knowing that the shares are trading close to the reported book value of about $23 per share. Otherwise, Fools may want to consider pure-play casino operators such as MGM Mirage (NYSE:MGM) or Station Casinos (NYSE:STN).

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.