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Good Times Restaurants Inc. (GTIM)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was soft: total revenues fell 3.3% year over year to $34.3M, net loss to common shareholders was $0.6M (–$0.06 diluted EPS), and Adjusted EBITDA was $1.0M .
  • Same-store sales declined at both brands (Bad Daddy’s −3.7%, Good Times −3.6%); Bad Daddy’s maintained a 13.6% restaurant-level operating profit margin despite lower average unit volumes, while Good Times margins compressed to 8.0% .
  • Management paused share repurchases to prioritize cash accumulation and debt repayment; sequential sales improved during the quarter, with marketing tests in connected TV/streaming showing promise .
  • No formal numeric guidance was provided; management flagged continued ground beef inflation and higher labor/training costs into Q3, and expects G&A to run 6–7% of revenues for FY25 .

What Went Well and What Went Wrong

What Went Well

  • Bad Daddy’s cost control: “our 13.6% Restaurant Level Operating Profit margin matched the prior year despite the deleveraging pressure of lower average unit volumes” .
  • Menu and beverage innovation: Smash n’ Stack burger moved to #4 in mix with better margin; $8 “Bad Ass Margarita” and zero-proof cocktails launched; Cinco de Mayo promotions drove “exceptionally strong” sales .
  • Marketing tests: connected TV/streaming and targeted digital spend showed promising early results; expansion planned in Q3 .

What Went Wrong

  • Same-store sales pressure: Bad Daddy’s −3.7%; Good Times −3.6% for the quarter; Good Times margins were hit by competitive discounting and elevated costs (food, labor, occupancy, other operating) .
  • Commodity inflation: ground beef costs “significantly elevated” versus prior year and expected to continue increasing; eggs spiked mid-quarter before moderating but remained above prior year .
  • Impairment and profitability: reported an impairment of long-lived assets ($0.494M) and posted a net loss to common shareholders of $(0.624)M (–$0.06 diluted EPS) .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Total Net Revenues ($USD Millions)$35.448 $35.8 $36.333 $34.279
Net Income (Loss) Attributable to Common Shareholders ($USD Millions)$0.618 $0.2 $0.164 $(0.624)
Diluted EPS ($USD)$0.06 $0.02 $0.02 $(0.06)
Adjusted EBITDA ($USD Millions, non-GAAP)$1.458 $1.3 $1.209 $1.021

Segment Breakdown (Company-Owned Restaurants)

MetricQ2 2024Q2 2025
Bad Daddy’s Restaurant Sales ($USD Millions)$26.448 $24.817
Bad Daddy’s Restaurant-Level Operating Profit Margin (%)13.6% 13.6%
Good Times Restaurant Sales ($USD Millions)$8.817 $9.323
Good Times Restaurant-Level Operating Profit Margin (%)12.2% 8.0%
Total Restaurant-Level Operating Profit ($USD Millions)$4.682 $4.126

KPIs

KPIQ2 2024Q1 2025Q2 2025
Same-Store Sales (Bad Daddy’s, YoY %)—+1.5% −3.7%
Same-Store Sales (Good Times, YoY %)—0.0% −3.6%
Avg Weekly Sales per Restaurant ($, Bad Daddy’s)$50.9 $47.8 $48.9
Avg Weekly Sales per Restaurant ($, Good Times)$27.1 $27.1 $26.6
Company Cash ($USD Millions)—$3.023 $2.712
Long-Term Debt ($USD Millions)—$2.6 $2.6
Shares Repurchased (Quarter)—59,125 54,835

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
G&A as % of RevenuesFY 2025~7% (Q1 comment) 6–7% run rate expected Maintained/Narrowed
Share RepurchasesNear-term (Q3 2025)Active, balanced with capex (Q1) Temporarily paused; redirect to cash accumulation and debt repayment Lowered
Maintenance CapExOngoing~1% of sales budgeted ~1% of sales; $0.3M in Q2 for remodels/signage Maintained
Labor CostsQ2 to Q3 FY25Expected higher YoY in Q2 due to wage/minimum wage impact Higher into Q3 amid training costs and market wages Raised/Maintained Caution
Commodity Costs (Ground Beef)FY 2025Expected increases through FY25 Continued increases expected; significantly elevated vs prior year Maintained
Marketing Mix (Good Times)1H FY25Testing radio reductions; more digital/YouTube Shift to connected TV/streaming; expanding tests Raised focus on CTV/Streaming

Note: No formal numeric guidance for revenues, margins, EPS, tax rate, or dividends was provided .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Marketing & Media MixReduced radio; heavier digital; GT Rewards growth Continued tests in audio, YouTube pre-roll; measuring impact Connected TV/streaming tests; expanding in Q3; targeted digital/search; outdoor options Shift accelerating toward streaming/digital
Commodity Inflation (Beef/Eggs)Elevated protein costs; beef at highs Expect beef costs to increase; eggs spiking from avian flu Beef significantly elevated; continued increases expected; eggs moderating but above prior year Persistent cost pressure
Labor/Wages & ProductivityColorado minimum wage increases; cost control focus Higher labor costs expected in Q2; productivity efforts Labor costs higher with training; productivity secondary to quality; higher into Q3 Cost pressure; training investments
Product InnovationSmash patty platform, indulgent LTOs GT burger/custard process improvements; West Slope double LTO Smash n’ Stack launch; Birria burger return; beverage overhaul; GT burger build changes, bun upgrade, fried ice cream LTO Ongoing innovation; margin-aware
Regional Trends—Weather hit Colorado and Southeast (Jan storms) Colorado-specific softness impacting both brands vs non-CO Bad Daddy’s CO market headwind
Capital AllocationShare repurchases expanded authorization Repurchases continued; balanced with capex Repurchases paused; cash/debt priorities More conservative near-term
Organizational Changes—GT remodels/acquisitions; operations improvements New GT Director of Operations; supply chain leader retiring; internal successor named Leadership realignment

Management Commentary

  • “The second fiscal quarter was disappointing, though sales improved sequentially throughout the quarter... I am impressed with our ability to control costs at our Bad Daddy’s brand as our 13.6% Restaurant Level Operating Profit margin matched the prior year...” — Ryan M. Zink, CEO .
  • “We tested connected TV and streaming video advertising... with promising results. We are expanding this advertising during the remainder of the June quarter...” .
  • “Good Times’ performance... experienced both sales declines and margin compression, most notably due to the continued discounting by our competitors... we are re‐evaluating our media mix... streaming video and connected TV...” .
  • “Sales improved sequentially throughout the quarter at both brands... marked differences... with the Colorado Bad Daddy’s sales performance more aligned with Good Times...” .
  • “Our team is focused on the right initiatives to drive long-term sales, traffic and profitability gains... guest-first mindset...” .

Q&A Highlights

  • Q2 2025 call had no analyst Q&A; the operator noted no questions before concluding the call .
  • Prior quarter Q1 themes (for context): capital allocation (share repurchases balanced with capex), legal case status (awaiting District Court ruling), seasonality impacts (winter months weaker; weather disruptions), and customer demographics insights (GT slightly male; BD balanced, upper-income blue-collar psychographic) .

Estimates Context

  • S&P Global consensus coverage for GTIM was unavailable for Q2 2025 (Primary EPS Consensus Mean, Revenue Consensus Mean, Target Price, Consensus Recommendation returned no values). As a result, we cannot quantify beats/misses versus Wall Street estimates for Q2 2025.*
  • Reported actuals: revenue $34.279M and Adjusted EBITDA $1.021M for Q2 2025; diluted EPS −$0.06 . Given declining comps and margin compression at Good Times, coverage models (where they exist) may need to reflect higher commodity and labor costs and the near-term pause in buybacks; however, no consensus data was available to benchmark this.*

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Bad Daddy’s resilience: despite softer volumes, maintained 13.6% restaurant-level margins; innovation (Smash n’ Stack, beverage overhaul) and targeted pricing support profitability .
  • Good Times margin reset: competitive discounting and elevated costs compressed margins to 8.0%; operational overhaul and marketing pivot aim to restore value perception and traffic .
  • Cost inflation remains a headwind: management expects continued ground beef pressure and higher labor/training costs into Q3; monitor commodity trends and labor mix .
  • Capital stance turned conservative: buybacks paused to bolster liquidity and reduce debt; near-term free cash flow prioritized for balance sheet strength and remodels .
  • Marketing evolution as a catalyst: connected TV/streaming and precision digital/OOH could drive traffic; watch for efficacy updates in Q3 .
  • Colorado divergence: regional softness weighed on both brands; any normalization in local trends could support sequential improvement .
  • No formal guidance: trade setup hinges on near-term traffic recovery, margin containment at Good Times, and sustaining Bad Daddy’s mix/pricing strategy; lack of consensus estimates limits beat/miss framing this quarter .