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Good Times Restaurants Inc. (GTIM)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered modest top-line growth and a return to profitability: Total revenues rose 9.6% to $36.333M, and diluted EPS was $0.02, versus a $0.05 loss in Q1 2024 . Same-store sales were +1.5% at Bad Daddy’s and flat at Good Times . Adjusted EBITDA was $1.209M .
  • Mix shift to Smash Patty burgers aided Bad Daddy’s restaurant-level margins (12.6% vs. 10.7% LY), while Good Times margins compressed to 8.6% amid higher labor, occupancy, and commodity costs .
  • Management flagged unusually severe January weather as a near-term headwind, with early Q2 same-store sales down ~5.5% at Bad Daddy’s and >7% at Good Times; trends improved post-storms, but visibility remains limited .
  • Development plans were dialed back: a previously contemplated Bad Daddy’s site was dropped (Q4 commentary), and franchise acquisitions are largely complete; focus shifts to remodels, menu engineering, pricing discipline, and ongoing share repurchases .

What Went Well and What Went Wrong

What Went Well

  • Smash Patty platform execution: “Classic Smash” and “Smokesmash” engineered to deliver value and better margins than BD’s American Cheeseburger, priced at $9.50 in Colorado and $1 less elsewhere; sequential improvement in food & beverage costs at Bad Daddy’s .
  • Bad Daddy’s comps and margin uplift: Same-store sales +1.5% with restaurant-level operating profit at $3.278M (12.6% of sales), up from $2.571M (10.7%) LY, driven by labor productivity and menu engineering .
  • Consolidated return to profitability: Net income attributable to common shareholders was $0.164M with diluted EPS of $0.02; Adjusted EBITDA improved to $1.209M from $0.510M in Q1 2024 .

What Went Wrong

  • Good Times margin pressure: Restaurant-level operating profit fell to $0.852M (8.6%), down 490 bps YoY, driven by higher wage rates (labor 36.7%, +290 bps), occupancy (+70 bps), and food/packaging (+100 bps) .
  • Weather-driven sales deleverage in early Q2: January storms caused widespread closures and reduced traffic; first four weeks same-store sales down ~5.5% at Bad Daddy’s and >7% at Good Times .
  • Commodity inflation risks: Tightening beef supply (January wholesale boneless beef price increases) and avian flu-related egg price spikes expected to pressure costs through FY25 .

Financial Results

Consolidated Financials (Quarterly)

MetricQ3 2024Q4 2024Q1 2025
Total Net Revenues ($USD Millions)$37.942 $35.794 $36.333
Net Income Attributable to Common ($USD Millions)$1.321 $0.230 $0.164
Diluted EPS ($USD)$0.12 $0.02 $0.02
Adjusted EBITDA ($USD Millions)$2.144 $1.275 $1.209

Consolidated YoY (Q1)

MetricQ1 2024Q1 2025
Total Net Revenues ($USD Millions)$33.157 $36.333
Diluted EPS ($USD)($0.05) $0.02

Segment Sales and Margins

Segment MetricQ3 2024Q4 2024Q1 2025
Bad Daddy’s Restaurant Sales ($USD Millions)$27.327 $25.644 $26.078
Bad Daddy’s RL Operating Profit ($USD Millions)$3.911 $3.491 $3.278
Bad Daddy’s RL Operating Margin (%)14.3% 13.6% 12.6%
Good Times Restaurant Sales ($USD Millions)$10.415 $9.958 $9.887
Good Times RL Operating Profit ($USD Millions)$1.723 $1.218 $0.852
Good Times RL Operating Margin (%)16.5% 12.2% 8.6%

KPIs

KPIQ3 2024Q4 2024Q1 2025
Bad Daddy’s Same-Store Sales (%)+1.2% +3.2% +1.5%
Good Times Same-Store Sales (%)+5.8% -0.1% 0.0%
Bad Daddy’s Avg Weekly Sales per Restaurant ($000)$52.6 $49.8 $47.8
Good Times Avg Weekly Sales per Restaurant ($000)$32.1 $29.7 $27.1

Liquidity Snapshot

MetricQ4 2024Q1 2025
Cash and Cash Equivalents ($USD Millions)$3.853 $3.023
Long-Term Debt ($USD Millions)$0.8 $2.6

Notes: Restaurant-level operating profit and Adjusted EBITDA are non-GAAP; definitions and reconciliations provided in company disclosures .

Guidance Changes

MetricPeriodPrevious Guidance/CommentaryCurrent Guidance/CommentaryChange
G&A as % of RevenuesFY 2025~7% expected in 2025 ~7% expected for FY 2025 Maintained
Bad Daddy’s Labor CostsQ2 2025Q1: labor would not show same YoY improvement as Q4 due to wage/seasonality Q2: higher YoY labor % likely (Colorado minimum wage + weather deleverage) Worsened
Ground Beef Commodity CostsFY 2025Expected to remain elevated with some late-Q4 easing Tightening supply; anticipate increases through FY 2025 Worsened
Development Pipeline (Bad Daddy’s)FY 2025One new unit targeted late FY Q2/early FY Q3 2025 Site reconsidered and passed; continue to look; high bar for new sites Lowered
Pricing (Good Times)Q1 2025Heading into Q1 with no price increase; monitor competition No Q1 price increase taken; continue to assess competitive pricing Maintained
Share Repurchase ProgramOngoingAuthorization expanded by $2M (total $7M) Repurchased 59,125 shares in Q1; continue opportunistically Maintained
Maintenance CapExOngoing~1% of sales budgeted ~1% of sales; $0.9M incurred in Q1 for remodels/acquisitions Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4)Current Period (Q1 2025)Trend
Smash Patty/menu engineeringQ3: Smash LTO immediate success, likely permanent ; Q4: Smash added permanently; strong value/margin Expanding Smash lineup; mix offsets ~half of 4.5% price increase Improving margin mix at Bad Daddy’s
Commodity costs (beef/eggs)Q3: Elevated protein costs; record ground beef prices ; Q4: ground beef began to ease late quarter but remains high Tightening beef supply; expect increases; avian flu driving egg spikes Worsening
Labor and operationsQ3: BD labor -90 bps; GT labor +160 bps ; Q4: BD labor -200 bps; GT labor +80 bps BD labor -70 bps; GT labor +290 bps; remodels and standards reviews tied to comp Mixed; GT pressured
Marketing/digitalQ3: Toast POS rollout; GT Rewards push ; Q4: audio spend experiment; shift to digital/social Radio/streaming/podcast; YouTube pre-roll; testing shorter spots Evolving toward digital
Weather/seasonalityQ4: Not a major factor; calendar shifts noted Severe January storms; early Q2 comps down significantly; seasonality Nov–Feb weaker Near-term headwind
Development & footprintQ3: Lease near signing; one opening targeted ; Q4: site dropped; focus on high-confidence sites Franchise acquisitions done; remodel cadence continues; no near-term franchise buys Slowed new unit growth
Legal update—Appeals remand to district court; briefing closed; awaiting ruling Status quo
Share repurchasesQ3: ~264k shares repurchased ; Q4: program expanded by $2M 59,125 shares repurchased in Q1; appetite remains at current valuation Ongoing, slower pace

Management Commentary

  • “The first quarter…was encouraging for Bad Daddy’s as we posted a 1.5% increase in same-store sales and better restaurant level margins… Classic Smash… engineered to meet the sweet spot of providing margin slightly better… priced at $9.50 in Colorado and $1 less everywhere else.” — Ryan Zink .
  • “Our Good Times brand experienced ongoing challenges resulting from higher costs… and a continued intense discounting by our competition.” — Ryan Zink .
  • “Same-store sales at Bad Daddy’s were down approximately 5.5% during the first 4 weeks of the second fiscal quarter and down more than 7% at Good Times… Trends have improved since then.” — Ryan Zink .
  • “We expect to run approximately 7% general and administrative costs on a full year basis for fiscal 2025.” — Keri August .
  • “We repurchased 59,125 shares during the quarter… Share repurchases will continue to be balanced with other capital needs.” — Keri August .

Q&A Highlights

  • Capital allocation: Management continues to prioritize share repurchases at current prices while funding Good Times remodels; franchise acquisitions largely complete .
  • Legal case: Appeals court remanded damages assessment to district court; briefing closed; timing uncertain, awaiting ruling .
  • Seasonality and weather: January is typically weak; Q2 should improve outside Colorado; unpredictable snow risk persists through spring .
  • Customer demographics: Good Times skews slightly male, ages 30–40; efforts to attract younger audiences via social/YouTube and remodels; Bad Daddy’s balanced 25–45 .
  • Menu/pricing strategy: Good Times to rationalize menu, push higher-margin items; resisting deep discounting given lack of scale vs. major QSRs .
  • Comp disclosure: Company chose not to pre-release comps this quarter; open to revisiting if industry practice shifts .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 2025 revenue and EPS was unavailable at the time of analysis due to data access limits. As a result, we cannot quantify beats/misses versus consensus for this quarter. We attempted retrieval but encountered system limits.*

Key Takeaways for Investors

  • Bad Daddy’s margin resiliency supported by Smash Patty menu engineering; watch for continued margin mix benefits even as beef inflation persists .
  • Good Times margins compressed materially; the near-term focus is operational quality over speed, menu rationalization, and targeted value rather than deep discounting to protect economics .
  • Severe January weather created transitory pressure on early Q2 comps; expect normalization but keep an eye on Colorado-driven variability and seasonal softness through February/March .
  • Development pivot reduces near-term unit growth; capital redeployment toward remodels and share repurchases may support per-share value but limits top-line expansion catalysts .
  • Cost inflation risk remains elevated (beef, eggs); management signaled further commodity pressure through FY25—pricing actions and mix will be key offset levers .
  • Liquidity is adequate but modest (Q1 cash $3.023M; LT debt $2.6M); continued buybacks balanced with remodel capex (~1% of sales) warrant monitoring of cash generation and credit capacity .
  • Near-term trading lens: absent consensus comp comparisons, narrative will trade on weather normalization, sustained Bad Daddy’s margin execution, and evidence of Good Times margin stabilization without resorting to unprofitable discounting .

*Estimates note: S&P Global consensus data was attempted but unavailable at time of analysis.