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Good Times Restaurants Inc. (GTIM)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 total net revenues were $35.8M, up 4.3% year over year; net income attributable to common shareholders was $0.2M ($0.02 diluted EPS). Adjusted EBITDA was $1.3M, modestly below the prior-year quarter’s $1.4M .
  • Brand divergence: Bad Daddy’s same-store sales rose 3.2% with restaurant-level margin improving to 13.6%, while Good Times same-store sales decreased 0.1% and restaurant-level margin compressed to 12.2% amid competitive discounting and higher costs .
  • Management expanded the share repurchase authorization by $2M to $7M total; ~$4.8M had been purchased under the program since 2022, and 57,436 shares were repurchased in Q4 2024. Capital deployment remains balanced with remodels and maintenance capex .
  • Near-term cost guidance points to elevated protein (ground beef) and wage pressures, limited further pricing at Good Times, and ~7% G&A in FY2025; development pace was reduced (one potential 2025 Bad Daddy’s site deferred), a key narrative driver for medium-term expectations .

What Went Well and What Went Wrong

What Went Well

  • Bad Daddy’s momentum: same-store sales +3.2% and restaurant-level operating margin improved to 13.6%; CEO noted the brand “significantly beat the Black Box casual dining index for both sales and traffic” in the quarter .
  • Product innovation and value without discounting: Bad Daddy’s smash patty platform “hits the trifecta—price, cost and margin,” with the Classic Smash becoming a top-4 menu item and strong penny profit at a low entry price point ($9 CO/$8 elsewhere) .
  • Record annual revenues: FY2024 total revenues reached an all-time high of $142.3M, reflecting portfolio actions and operational improvements at both concepts .

What Went Wrong

  • Good Times brand headwinds: same-store sales -0.1%, restaurant-level margin fell 400 bps YoY to 12.2% on elevated input, labor, occupancy, and other operating costs .
  • Competitive discounting: management cited “extreme discounting” in QSR, with large competitors pushing $5 price points; GTIM emphasized quality/value over deep discounts, pressuring near-term traffic .
  • Cost inflation: ground beef remained at “all-time high” during the quarter; food & beverage costs expected to rise sequentially into Q1 given commodity lags and holiday mix, limiting margin expansion near term .

Financial Results

Consolidated Results vs Prior Year and Prior Quarter

MetricQ4 2023Q3 2024Q4 2024
Total Net Revenues ($USD Millions)$34.33 $37.94 $35.79
Net Income to Common ($USD Millions)$(0.25) $1.32 $0.23
Diluted EPS ($USD)$(0.02) $0.12 $0.02
Adjusted EBITDA ($USD Millions)$1.36 $2.14 $1.28
Income from Operations ($USD Millions)$(0.41) $1.23 $(0.12)

Segment Sales

MetricQ4 2023Q3 2024Q4 2024
Bad Daddy’s Restaurant Sales ($USD Millions)$24.65 $27.33 $25.64
Good Times Restaurant Sales ($USD Millions)$9.46 $10.42 $9.96

Same-Store Sales (SSS)

BrandQ3 2024Q4 2024
Bad Daddy’s Burger Bar+1.2% +3.2%
Good Times Burgers & Frozen Custard+5.8% -0.1%

Restaurant-Level Operating Profit and Margins

MetricQ4 2023Q3 2024Q4 2024
Bad Daddy’s RL Operating Margin (%)10.6% 14.3% 13.6%
Good Times RL Operating Margin (%)16.2% 16.5% 12.2%
Total Restaurant-Level Operating Profit ($USD Millions)$4.14 $5.63 $4.71

KPIs

KPIQ4 2023Q3 2024Q4 2024
Avg Weekly Sales per Restaurant – Bad Daddy’s ($)$48.1 $52.6 $49.8
Avg Weekly Sales per Restaurant – Good Times ($)$30.2 $32.1 $29.7
Restaurants Open at Period End – Bad Daddy’s (#)40 40 39
Restaurants Open at Period End – Good Times (#)25 26 25
G&A (% of Total Revenues)6.1% (calc from $2.095M/$34.331M) 7.1% 7.6%
Cash ($USD Millions)$4.18 $4.82 $3.85
Long-Term Debt ($USD Millions)n/a$1.1 $0.8
Share Repurchases (Quarter)n/a263,516 shares (incl. ~171k negotiated) 57,436 shares
Repurchase Authorization$5M prior ~$1.5M remaining at Q3 end Expanded to $7M total; ~$4.8M purchased to date

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Bad Daddy’s menu pricingQ1 FY2025Next increase targeted around end of fiscal Q1 (context from Q3) Took ~2.5% blended increase mid-Nov; no further increases expected near term (offset by mix) Implemented/maintained
Good Times menu pricingQ1 FY2025Next increase targeted around end of fiscal Q1 (context from Q3) No menu price increase planned; monitoring competition to respond rapidly if warranted Lowered
Food & beverage costsQ1 FY2025Elevated beef/protein expected into Q4 FY2024 Expect sequential rise vs Q4; similar to or slightly above prior-year Q1 levels Raised
Labor costsQ1 FY2025Ongoing wage pressure; labor % expected slightly elevated (Q3) CO minimum wage to $14.81 (+2.7%); tip wage to $11.79 (+3.3%); Q1 labor % to be less favorable YoY vs Q4 Raised
G&A (% of revenues)FY2025~7.1% run-rate in Q3 ~7% expected for FY2025 as costs normalize Slightly lowered
Development pipelineFY2025One Bad Daddy’s opening targeted late Q2/Q3 FY2025 (subject to lease approvals) Deferred that specific site; actively evaluating but only pursuing high-confidence locations Lowered
Share repurchasesFY2025~$1.5M remaining on $5M authorization at Q3 end; potential expansion expected Authorization expanded by $2M to $7M total; ongoing open-market repurchases Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Pricing & PromotionsTargeted increases (Bad Daddy’s ~4.7% in Q2; ~4.4% in Q3). Cautious on price hikes amid value-seeking environment .Bad Daddy’s took ~2.5% blended increase in mid-Nov; Good Times holding prices in Q1 while monitoring competitors .Cautious pricing; value via product/merchandising, not deep discounting.
Commodity costs (beef)Rising beef costs flagged; expected to remain elevated in Q4 FY2024 .Ground beef at “all-time high” during Q4; purchase cost lags market ~2 months; sequential rise expected in Q1 .Continued cost pressure near term.
Labor/wage dynamicsHiring improved but wages rising; margin impact likely in Q4 .CO minimum wage/tip wage increases effective Jan; Q1 labor % less favorable YoY vs Q4 .Wage pressure persists.
Technology & digitalToast POS rollout at Good Times; GT Rewards adoption effort .Good Times completed next-gen POS across CO; digital focus and testing college athlete partnerships; GT Rewards traction .Execution scaling; engagement improving.
Product innovationSeasonal LTO success (pizza burger/chicken parm in Q2); smash patties introduced in Q3 .Smash patties made permanent; CYO smash options; strong seasonal LTO performance .Sustained menu-led differentiation.
Development pipelineOne lease near approval; ~1 unit/12 months cadence; conservative debt posture .Passed on planned FY2025 site after further diligence; selective pipeline maintained .Slower near-term unit growth.
Regional trendsAtlanta recovery improving (Q3) .Not reiterated in Q4; emphasis on system-wide ops excellence .Stabilizing; focus broad.
Capital allocationRepurchases active; anticipated authorization expansion (Q3) .Authorization expanded to $7M; repurchased ~57k shares in Q4; balancing with remodel capex .Incrementally more shareholder returns.
Marketing mixAudio reduced in Oct–Nov; testing shifts toward digital; radio reinstated Dec 9 (Q4) .Measuring impact; increased digital/social and sports partnerships .Mix evolving toward digital.
QSR competitive discountingValue focus without deep discounts (Q3) .“Extreme discounting” at $5 price points weighed on Good Times; GTIM to emphasize quality/value .Elevated external pricing pressure.

Management Commentary

  • “Bad Daddy’s performance significantly beat the Black Box casual dining index for both sales and traffic during the quarter.” — Ryan M. Zink, CEO .
  • “Our smashed patty platform…hits the trifecta—price, cost and margin…low entry price of $9 in Colorado and $8 everywhere else…provides strong penny profit…” — Ryan M. Zink .
  • “Good Times experienced softer sales…due to the return of extreme discounting in the quick service space…centered around the five dollar price point…we are choosing a different path.” — Ryan M. Zink .
  • “Adjusted EBITDA for the quarter was $1.3 million…We finished the quarter with $3.9 million in cash and $0.8 million of long-term debt…Today, we announced an expansion of the program, providing an additional $2 million of authorized share repurchases…” — Keri A. August .
  • “We are approaching the new year with…re-training our teams…operations excellence at Good Times…brand evolution through our remodels…” — Ryan M. Zink .

Q&A Highlights

  • The Q4 transcript consisted of prepared remarks outlining brand performance, cost expectations, pricing actions, digital/marketing shifts, store remodels, and capital allocation; management addressed typical analyst focus areas (pricing cadence, cost trajectory, development pipeline, and repurchases) within the prepared commentary .
  • Development clarity: one FY2025 Bad Daddy’s site was deferred after repeated visits; management remains selective and confidence-threshold-driven for new units .
  • Pricing posture: Bad Daddy’s implemented ~2.5% blended increase mid-Nov; Good Times is not planning a Q1 price increase, prioritizing value messaging and product innovation over deep discounts .
  • Cost and margin trajectory: sequential food & beverage cost pressure expected in Q1; labor costs elevated with Jan wage increases; G&A targeted ~7% for FY2025 .

Estimates Context

  • Wall Street consensus estimates (S&P Global Capital IQ) for Q4 2024 and forward quarters were unavailable at the time of query due to vendor limits; therefore, explicit comparisons to consensus EPS/revenue and target price cannot be provided. If needed, we can re-attempt retrieval and update this section once access is restored.
  • Implications: Absent consensus, results suggest potential upward revisions to Bad Daddy’s segment margin expectations given sustained mix and process improvements, and potential downward adjustments to Good Times near-term comp assumptions amid intensified discounting in QSR and higher costs .

Key Takeaways for Investors

  • Bad Daddy’s is driving the consolidated story: positive comps, improved restaurant-level margin, and successful product innovation without broad discounting; this supports medium-term margin durability despite commodity and wage headwinds .
  • Good Times faces acute competitive discounting; management is holding price, focusing on value through product quality and merchandising—expect near-term comp/margin pressure until promotional intensity abates .
  • Cost inflation remains the primary risk: ground beef at cycle highs and wage step-ups into Q1 likely pressure sequential margins despite targeted pricing and mix; watch sequential cost-of-sales and labor lines .
  • Capital allocation is shareholder-friendly: authorization raised to $7M with ongoing repurchases; remodeling continues to drive sales turnarounds and brand modernization (Thornton remodel, CO acquisitions) .
  • Development pace prudently slower: site deferred to avoid marginal returns; pipeline discipline reduces execution risk but tempers unit growth catalysts near term .
  • KPI watchlist: Bad Daddy’s same-store sales/mix from Smash platform; Good Times traffic recovery vs $5 value competition; G&A normalization to ~7%; cash/debt flexibility to fund remodels and repurchases .
  • Trading lens: Near-term volatility tied to cost inflation and QSR discounting; medium-term thesis depends on Bad Daddy’s margin trajectory and GT digital/brand refresh translating to comp stability as promotions normalize .