Good Times Restaurants Inc. (GTIM) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
Despite a decrease in total revenues and same-store sales, there were improvements in cost management and operating profit margins. The company plans to address value concerns and expand offerings, but faces risks like increased competition and economic conditions. The Q&A session revealed a focus on debt reduction and potential development, but no new partnerships or guidance changes were announced. Given these mixed signals and no significant catalysts, the stock price reaction is expected to be neutral over the next two weeks.
Key Financial Performance
Total Revenues $32.7 million, a decrease of approximately 10% year-over-year. The decrease was primarily due to an additional week in the prior year fiscal quarter versus the current year fiscal quarter.
Bad Daddy's Total Restaurant Sales $23.2 million, a decrease of $2.9 million year-over-year. The decrease was due to an additional week in the prior year fiscal quarter, the closure of one restaurant in Q4 2025, and another in the current quarter, partially offset by menu price increases.
Bad Daddy's Same-Store Sales Decreased 1.2% year-over-year. This was a significant improvement over the prior quarter's decrease.
Bad Daddy's Food and Beverage Costs 30.2%, a 130 basis point decrease year-over-year. The decrease was due to recipe portion and waste controls, and lower chicken and cheese prices, partially offset by higher beef, bacon, and bison prices.
Bad Daddy's Labor Costs 34.5%, a decrease of 60 basis points year-over-year. The decrease was due to reduced incentive compensation and other employee benefit costs, partially offset by decreased labor productivity and higher average wage rates.
Bad Daddy's Restaurant-Level Operating Profit $3.2 million or 13.7% of sales, compared to $3.4 million or 13% last year. The increase as a percentage of sales was due to favorability in food and labor costs.
Good Times Total Restaurant Sales $9.2 million, a decrease of $0.7 million year-over-year. The decrease was due to a 3.1% decline in same-store sales.
Good Times Same-Store Sales Decreased 3.1% year-over-year. This was a notable improvement over the prior quarter's decrease.
Good Times Food and Packaging Costs 30.8%, a decrease of 100 basis points year-over-year. The decrease was due to recipe portion and waste controls, and lower chicken and egg prices, partially offset by higher beef and bacon prices.
Good Times Labor Costs 35%, a decrease of 170 basis points year-over-year. The decrease was due to increased labor efficiency, partially offset by higher average wage rates.
Good Times Restaurant-Level Operating Profit $0.9 million or 10.3% of sales, flat year-over-year. The increase as a percentage of sales was due to favorability in food and labor costs.
Combined General and Administrative Expenses $2.1 million or 6.3% of total revenues, a decrease of 80 basis points year-over-year. The decrease was due to reduced multiunit supervision costs, health insurance underwriting costs, and technology costs.
Net Income to Common Shareholders $0.2 million or $0.02 per share, flat year-over-year.
Adjusted EBITDA $1.3 million, flat year-over-year.
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Operating Highlights
Cook-to-order transition at Good Times: Transitioned to cook-to-order process for fresher, tastier patties using 100% Angus beef, achieving speed of service under 3 minutes without cost increment.
New loyalty program at Good Times: Enhanced loyalty program powered by Thanx, increasing loyalty attachment rate from 3%-4% to over 7% in two months, with some restaurants exceeding 10%.
Menu updates at Bad Daddy's: Introduced Mediterranean protein bowl, Elote dip, and Giant Bavarian pretzel to core menu; shifting to a Burger of the Month platform for flexibility.
Brand study at Bad Daddy's: Launched a brand study to refresh guest perception research, influencing future product and promotional decisions.
Cost management: Achieved lower food and packaging costs through recipe portion and waste controls, and experienced favorability in chicken and cheese prices.
Labor cost efficiency: Reduced labor costs as a percentage of sales due to improved efficiency and reduced incentive compensation.
Focus on guest-first mindset: Emphasized delivering consistent guest experience with high-quality ingredients and exceptional operations execution to drive long-term sales and profit gains.
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Risk or Challenges
Market price of the company's stock: The market price of the company's stock prevailing from time to time poses a risk to financial stability and investor confidence.
Pandemics and public health emergencies: Disruption to business operations due to pandemics and other public health emergencies.
Staffing constraints: Impact of staffing constraints at restaurants, which could affect service quality and operational efficiency.
Supply chain constraints and inflation: Challenges due to supply chain constraints and inflation, potentially leading to increased costs and operational disruptions.
Restaurant development plans: Uncertainty in current restaurant development plans and the ability to implement and integrate new restaurants.
Weather-related disruptions: Delays in developing and opening new restaurants due to weather, as well as operational disruptions caused by severe weather events like Winter Storm Fern.
Increased competition: Increased competition in the restaurant industry, which could impact market share and profitability.
Ingredient shortages and cost increases: Cost increases or shortages of ingredients, such as higher beef, bacon, and bison prices.
Economic and operating conditions: General economic and operating conditions that could adversely affect consumer spending and business performance.
Share repurchase program risks: Risks associated with the company's share repurchase program, which could impact financial flexibility.
Acquisition of additional restaurants: Risks related to the acquisition of additional restaurants, including integration challenges.
Cash flow adequacy and liquidity: Concerns about the adequacy of cash flows and the cost and availability of capital or credit facility borrowings to provide liquidity.
Regulatory changes: Changes in federal, state, or local laws and regulations affecting restaurants, including wage and tip credit regulations.
Labor costs and wage increases: Higher average wage rates and minimum wage increases, which could pressure labor costs and profitability.
Utility and maintenance costs: Increased utility and repair/maintenance expenses, which could impact operating margins.
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Guidance & Outlook
Sales Trends: Underlying sales trends in the second quarter have continued to improve at both brands.
Menu Pricing Adjustments: Good Times plans to take a 1% menu price increase in late February and continue monitoring competitor pricing for potential adjustments. Bad Daddy's expects to increase menu prices by approximately 1.1% in April.
Product and Menu Updates: Bad Daddy's will add a Mediterranean protein bowl to its core menu in April and introduce a Burger of the Month platform starting in March. The company plans to lean more into its Smashburger lineup and promote its diverse product offerings.
Marketing and Brand Research: Bad Daddy's is conducting a brand study to refresh guest perceptions, with results expected in the second fiscal quarter to influence future product and promotional decisions.
Cost Management: Input costs for beef and bacon have decreased into the second quarter, and the company plans to continue surgical pricing adjustments to manage costs effectively.
Labor Costs: Colorado's minimum wage increased in January 2026, impacting labor costs. The company expects continued solid labor controls on a full-year basis.
General and Administrative Expenses: The company anticipates general and administrative costs to be 6% to 7% of total revenues for fiscal 2026.
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Shareholder Return Plan
share repurchase program: Risks associated with our share repurchase program were mentioned as part of the forward-looking statements. However, no specific details or updates about the program were provided during the call.
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Key Q&A
Q:What is the company's plan for deploying cash after buying back the remaining franchises of Good Times?
A:The first priority is paying down the remaining debt. The second priority is building additional cash. Beyond that, the company plans to resume share repurchases and prioritize Bad Daddy's development. They are currently evaluating a couple of potential sites for development.
Q:Review of Unclear Management Responses
A:None of the questions were avoided or lacked clarity. The management provided clear and direct answers to the single question asked.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Accounting Officer
Bad Daddy
Burger Month
Chief Accounting
LTO
Month platform
North
attachment rate
beef bacon
brand
chicken
core menu
decision
decrease recipe
delivery repair
employee
favorability food
food labor
guest feedback
improvement decrease
industry
loyalty program
messaging
order
patty
percentage
point decrease
portion waste
price beef
pricing change
program attachment
program visit
protein bowl
recipe portion
storm
waste control
GTIM Transcript
Good Times Restaurants Inc. (GTIM) Q2 2026 Earnings Call Transcript
Unknown5-9
The earnings call presents a mixed picture. Positive elements include revenue and net income growth, improved gross margin, and increased cash flow. However, significant challenges such as staffing and supply chain constraints, inflation, and delays in restaurant development temper these positives. The absence of a shareholder return plan discussion and unclear management responses in the Q&A further contribute to uncertainty. Given these factors, a neutral sentiment is appropriate, reflecting balanced positive financial performance against operational and strategic challenges.
Good Times Restaurants Inc. (GTIM) Q1 2026 Earnings Call Transcript
Unknown2-5
Despite a decrease in total revenues and same-store sales, there were improvements in cost management and operating profit margins. The company plans to address value concerns and expand offerings, but faces risks like increased competition and economic conditions. The Q&A session revealed a focus on debt reduction and potential development, but no new partnerships or guidance changes were announced. Given these mixed signals and no significant catalysts, the stock price reaction is expected to be neutral over the next two weeks.
Good Times Restaurants Inc. (GTIM) Q4 2025 Earnings Call Transcript
Unknown12-23
The earnings call revealed disappointing financial results with decreased revenues, increased costs, and a net loss. Despite some optimistic guidance for fiscal 2026, the lack of Q&A engagement and absence of a clear shareholder return plan add to uncertainty. The negative sentiment is compounded by regulatory challenges and operational cost increases, leading to a likely negative stock reaction.
Good Times Restaurants Inc. (GTIM) Q3 2025 Earnings Call Transcript
Unknown8-9
The earnings call reveals several concerns: decreased sales, increased costs, and underperformance of the Good Times concept, despite some positive aspects like improved net income and cash reserves. The Q&A highlights management's reluctance to provide forward guidance, contributing to uncertainty. Despite strategic shifts and potential future projects, the immediate outlook appears challenging, leading to a likely negative stock reaction.
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