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Good Times Restaurants Inc. (GTIM)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue declined 2.4% year over year to $37.0M, while diluted EPS rose to $0.14 from $0.12 as management controlled costs and reduced G&A; same-store sales were -1.4% at Bad Daddy’s and -9.0% at Good Times .
  • Brand performance diverged: Bad Daddy’s restaurant-level operating profit margin improved slightly to 14.4%, while Good Times margins compressed to 11.2% on higher beef, eggs, and labor costs .
  • Management hired a senior marketing leader and will launch the “Colorado Native Burgers” campaign, refresh digital assets, and selectively test pricing; they flagged record-high ground beef prices into Q4 and potential menu price increases to offset input inflation .
  • No formal revenue/EPS guidance; management indicated full-year G&A should be 6–7% of revenues and expects share repurchases to be selective near term with potential acceleration into FY2026 depending on liquidity and macro backdrop .

What Went Well and What Went Wrong

What Went Well

  • Bad Daddy’s cost discipline: food and beverage costs fell 60 bps YoY to 30.6%, supporting steady restaurant-level margin at 14.4% despite softer sales .
  • Marketing and product initiatives: new “Colorado Native Burgers” campaign (outdoor, social, streaming video), refreshed web/mobile app, and operational changes (new burger builds, cook-to-order progress); Fried Ice Cream LTO at Good Times was “the most successful new product…in several years” by units sold .
  • Reduced overhead: combined G&A expenses declined to $2.2M (5.9% of revenues), down 120 bps YoY, aiding profitability .

What Went Wrong

  • Same-store sales pressure: Bad Daddy’s -1.4% and Good Times -9.0% YoY, reflecting value-oriented consumers and competitor discounting; Good Times margins compressed across the P&L .
  • Commodity and labor inflation: record-high ground beef expected to persist; eggs eased but remain above prior year, while labor costs rose 150 bps YoY at Good Times due to wage inflation and deleveraging .
  • Good Times profitability decline: restaurant-level operating profit fell to $1.2M and margin to 11.2% (down 530 bps YoY) due to elevated costs and lack of price increases .

Financial Results

Consolidated Results vs prior periods and YoY

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total Net Revenues ($USD)$37.950M $36.333M $34.279M $37.025M
Net Income Attributable to Common ($USD)$1.321M $0.164M $(0.624)M $1.487M
Diluted EPS ($)$0.12 $0.02 $(0.06) $0.14
Adjusted EBITDA ($USD)$2.355M $1.209M $1.021M $2.171M

Segment Revenue and Margins

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Bad Daddy’s Restaurant Sales ($USD)$27.327M $26.078M $24.817M $26.513M
Bad Daddy’s RL Operating Profit ($USD)$3.911M $3.278M $3.378M $3.813M
Bad Daddy’s RL Margin (%)14.3% 12.6% 13.6% 14.4%
Good Times Restaurant Sales ($USD)$10.415M $9.887M $9.323M $10.356M
Good Times RL Operating Profit ($USD)$1.723M $0.852M $0.748M $1.157M
Good Times RL Margin (%)16.5% 8.6% 8.0% 11.2%
Total RL Operating Profit ($USD)$5.634M $4.130M $4.126M $4.970M

KPIs and Operating Metrics

KPIQ3 2024Q3 2025
Bad Daddy’s Same-Store Sales YoY (%)—-1.4%
Good Times Same-Store Sales YoY (%)—-9.0%
Bad Daddy’s Avg Weekly Sales per Restaurant ($000)$52.6 $52.3
Good Times Avg Weekly Sales per Restaurant ($000)$32.1 $29.5
Cash & Cash Equivalents ($USD)$3.853M (FY24 YE) $3.138M (Q3 2025)
Long-Term Debt ($USD)—$2.3M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
G&A as % of RevenuesFY2025—6–7%New disclosure
Commodity Outlook (Beef)Q4 FY2025—“Record high ground beef prices”; expect further increasesNew headwind
Pricing Actions (GTIM/BD)2H FY2025—Selective ~1% price test at subset of Good Times stores Aug 1; considering incremental menu price at both conceptsNew action
Share RepurchasesFY2025–FY2026Active but reducedSelective near term; potential acceleration into FY2026Maintained with timing color
Technology ProjectsFY2026—Replace legacy POS at Bad Daddy’sNew project plan

No formal revenue, EPS, margin, tax, or segment guidance ranges were provided .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 FY2025)Current Period (Q3 FY2025)Trend
Marketing & AdvertisingShift away from radio; tests in connected TV/streaming; exploring outdoor; increasing digital targeting Hire Jason Murphy; launch “Colorado Native Burgers” campaign; refreshed web/app; outdoor/social/streaming rollout Execution intensifies
Pricing & ValueBad Daddy’s value-oriented Smash n’ Stack; avoiding deep discounting in QSR Good Times ~1% price test; considering price increases at both brands to offset beef costs; maintain quality positioning vs competitors’ discounting Moving towards selective pricing
Supply Chain/CommoditiesSequentially lower beef costs in Q1; commodity pressures expected Record-high ground beef into Q4; eggs eased but above prior year; potatoes favorable Beef inflation worsening
Labor & ProductivityHigher staffing at Good Times; labor productivity not where needed; focus on execution Good Times labor up 150 bps; deleverage on lower sales; productivity impacted Labor pressure persists
Product/OperationsNew burger builds; smashed patties test; custard improvements; Fried Ice Cream LTO planned Fried Ice Cream LTO highly successful; closer to cook-to-order; burger build rollout; schedule adjustments for GM coverage Operational upgrades gaining traction
Capital AllocationPause/slow repurchases; prioritize liquidity/debt paydown Selective buybacks; cash accumulation priority; optionality for debt paydown/new units; potential acceleration FY2026 Discipline maintained

Management Commentary

  • “Results during our third fiscal quarter were a mixed bag…Same store sales at Bad Daddy’s…[and] at Good Times…declined sequentially compared to the second quarter…we’ve hired a new marketing leader…Jason Murphy…[to] lead all advertising…including web and mobile app” .
  • “We increased pricing by approximately 1% in a subset of our [Good Times] stores on August 1…we believe that we have the ability to take price without significant traffic erosion…discounting has preserved sales, but at the expense of restaurant level margins” .
  • “Both concepts are facing record high ground beef prices in the fourth fiscal quarter…we are considering incremental menu price to offset…input cost inflation” .
  • “Food and beverage costs [Bad Daddy’s] were 30.6%…a decrease of 60 bps…primarily attributable to lower purchase prices…partially offset by increased ground beef costs” .
  • “Good Times…labor cost increased to 34.2%, a 150 bps increase…due to higher average wage rates…and decreased productivity…restaurant-level operating profit decreased…to $1.2M…11.2% of sales” .
  • “We expect to run between 6–7% general and administrative costs on a full year basis for fiscal 2025” .
  • “We are being a little more reserved on…special project CapEx…priority first really is building up additional cash reserves…optional[ity] for debt pay down, additional share repurchase or…new store development…replace legacy POS [at Bad Daddy’s] during fiscal 2026” .

Q&A Highlights

  • EBITDA cadence and CapEx: Management cautioned Q3 EBITDA (~$2.2M) is among the highest seasonal quarters; no forward EBITDA guidance; maintenance CapEx ~1% of sales; prioritizing cash accumulation with optionality for debt paydown, repurchases, and selective development .
  • Investment CapEx & IRR: New unit hurdle rate around 20%+; special project CapEx (e.g., POS) is required and not IRR-driven; remodel CapEx has “strong ROI,” with signage replacement necessary .
  • Good Times underperformance: Factors include competitor discounting, macro/geographic dynamics, and management’s focus on margins over deep discounting; plan to communicate brand value and increase advertising rather than heavy discounting .
  • Share repurchases: Selective in near term; any acceleration likely in FY2026 subject to macro and internal forecasts .
  • FY2026 projects: Finalize Good Times remodel/signage; replace Bad Daddy’s POS; pursue new unit opportunities if economics and real estate terms are favorable .

Estimates Context

  • Wall Street consensus from S&P Global: Consensus EPS and revenue estimates for GTIM’s Q3 FY2025 were unavailable in S&P Global; only actuals are present. As a result, an estimates-based beat/miss analysis cannot be performed.*
  • Reported actuals: Revenue $37.025M; diluted EPS $0.14 .*

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term margin resiliency at Bad Daddy’s despite soft traffic underscores strong cost controls; watch commodity and pricing actions for Q4 impact .
  • Good Times remains the focal point for turnaround via marketing, menu engineering, and selective pricing; Fried Ice Cream LTO success and burger build improvements are encouraging, but labor/commodity inflation remain headwinds .
  • No formal guidance; operational levers (pricing, advertising mix, POS modernization) and disciplined capital allocation (cash build, selective buybacks) define FY2025 posture .
  • Beef inflation is the critical variable; management signaled potential price increases across both brands to protect unit economics—monitor traffic elasticity and competitor discounting intensity .
  • Liquidity and optionality: $3.1M cash, $2.3M long-term debt at quarter end; management prioritizes cash accumulation, providing flexibility for FY2026 projects and capital returns .
  • Narrative catalysts: “Colorado Native Burgers” brand campaign, digital/app refresh, and outdoor/social/streaming push could drive traffic normalization in Colorado and beyond; execution and ROI tracking are key .
  • Medium-term thesis: Bad Daddy’s as margin anchor with product innovation and disciplined pricing; Good Times as turnaround candidate leveraging brand story and improved operations, contingent on inflation easing and effective marketing .