Financial Data and Key Metrics Changes - Total restaurant sales for Bad Daddy's increased by 26.1 million for the quarter, primarily due to an additional week in the current fiscal quarter and menu price increases [26][64] - Same-store sales for Bad Daddy's increased by 1.5%, while Good Times' same-store sales remained flat compared to the prior year [6][12] - Good Times' total restaurant sales increased by approximately 9.9 million for the quarter [32][69] - Net income to common shareholders for the quarter was 0.02 per share, compared to a net loss of 0.05 per share in the first quarter last year [37][75] - Adjusted EBITDA for the quarter was 0.5 million for the first quarter of 2024 [37][75] Business Line Data and Key Metrics Changes - Bad Daddy's food and beverage costs were 31.5%, unchanged from the previous year, while Good Times' food and packaging costs increased to 31.8%, a 100 basis point increase [27][70] - Labor costs for Bad Daddy's decreased by 70 basis points to 35.1%, while Good Times' total labor cost increased to 36.7%, a 290 basis point increase from the prior year [28][73] - Restaurant-level operating profit for Bad Daddy's was approximately 2.6 million or 10.7% last year [31][68] - Good Times' restaurant-level operating profit decreased by 0.9 million, with a decrease in profit margin to 8.6% [36][74] Market Data and Key Metrics Changes - Same-store sales at Bad Daddy's were down approximately 5.5% during the first four weeks of the second fiscal quarter, and down more than 7% at Good Times due to adverse weather conditions [61] - The average menu price during the quarter for Bad Daddy's was 4.5% higher than the same quarter in 2024, while Good Times had an average menu price increase of approximately 3.9% [26][70] Company Strategy and Development Direction - The company is focusing on product quality and menu rationalization to drive purchasing behavior towards better margin products [107] - There is an ongoing effort to renovate the Good Times brand to keep it competitive, with recent remodels and acquisitions of previously franchised restaurants [87][39] - The company is exploring new locations for Bad Daddy's but is being selective about site choices [81][83] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges from higher costs and intense competition, particularly for the Good Times brand [11][50] - The company expects ground beef costs to continue to increase throughout fiscal year 2025 due to tightening supply [66][71] - Management expressed optimism about improving trends following a difficult January, emphasizing the focus on operational initiatives to enhance customer experiences [118] Other Important Information - The company finished the quarter with 2.6 million of long-term debt, and repurchased 59,125 shares during the quarter [38][76] - The company incurred $0.9 million of CapEx during the first fiscal quarter related to remodels and acquisitions [39][76] Q&A Session Summary Question: Plans for new locations for Bad Daddy's - Management is actively looking for new locations but is selective about site choices, with a successful location in Madison, Alabama serving as a model [81][83] Question: Capital allocation plan and share buyback - Management plans to continue share repurchases and invest in renovations for the Good Times brand, with a strong appetite for share buybacks at current valuations [85][88] Question: Update on the legal case - There has been no movement since the last call, and the case is currently awaiting a decision from the district court [90] Question: Insights on seasonality and weather impact - Management noted that January was particularly challenging due to adverse weather, but February is expected to improve [96][97] Question: Customer demographics for both brands - Good Times tends to attract a slightly older demographic, while Bad Daddy's appeals to a broader age range, with efforts to modernize the brand to attract younger customers [100][102] Question: Menu adjustments to offset cost increases - Management is focusing on product quality and menu rationalization to drive sales and improve margins without resorting to discounting [107][108] Question: Future of comp sales announcements - Management is evaluating the practice of pre-releasing comp sales based on industry trends and may return to it if deemed beneficial [112][114]
Good Times(GTIM) - 2025 Q1 - Earnings Call Transcript