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01/10 16:00
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture. Record revenue and improved net income are positive, while rising costs and flat same-store sales present challenges. The share repurchase program is a positive signal, but the lack of clear guidance on the legal case and location expansion limits optimism. The Q&A reveals cautious sentiment from analysts, especially regarding cost management and growth strategy. These factors balance each other out, suggesting a neutral stock price movement.
Total Restaurant Sales (Bad Daddy's) $26,100,000, an increase of $2,000,000 year-over-year, primarily due to an additional week in the current fiscal quarter and menu price increases, partially offset by the closure of one restaurant and negative mix shift.
Same Store Sales (Bad Daddy's) Increased by 1.5% year-over-year.
Food and Beverage Costs (Bad Daddy's) 31.5%, unchanged from last year, due to menu price increase and favorable cost of sales from Smash Patty Burgers, offset by higher commodity prices.
Labor Costs (Bad Daddy's) Decreased by 70 basis points to 35.1%, due to higher sales leveraging fixed labor costs and increased productivity, offset by higher average wage rates.
Restaurant Level Operating Profit (Bad Daddy's) $3,300,000 or 12.6% of sales, compared to $2,600,000 or 10.7% last year, primarily due to labor and operating cost savings.
Total Restaurant Sales (Good Times) $9,900,000, an increase of $1,100,000 year-over-year, with same store sales remaining flat.
Same Store Sales (Good Times) Remained consistent with the prior year quarter.
Average Menu Price Increase (Good Times) Approximately 3.9% over the same prior year quarter.
Food and Packaging Costs (Good Times) 31.8%, an increase of 100 basis points year-over-year, primarily due to higher purchase prices, partially offset by menu pricing increase.
Total Labor Costs (Good Times) Increased to 36.7%, a 290 basis point increase from 33.8% last year, due to higher wage rates and decreased productivity.
Occupancy Costs (Good Times) 9.6%, an increase of 70 basis points from the prior year, due to lease extensions and property tax increases.
Restaurant Level Operating Profit (Good Times) Decreased by $300,000 to $900,000, or 8.6% of sales, due to elevated costs.
General and Administrative Expenses $2,600,000 or 7.1% of total revenues, steady from the prior year.
Net Income $200,000 or $0.02 per share, compared to a net loss of $600,000 or $0.05 per share in the prior year.
Adjusted EBITDA $1,200,000 compared to $500,000 for the first quarter of twenty twenty-four.
Cash and Long-term Debt $3,000,000 in cash and $2,600,000 of long-term debt.
Share Repurchases 59,125 shares repurchased during the quarter.
Capital Expenditures (CapEx) $900,000 incurred during the first fiscal quarter.
New Product Launches: Introduced new seasonal specials including meatball sliders and potato tots soup, and the return of the winter salad. Upcoming spring offerings include the Birria Burger and new food and drink items.
Menu Engineering: Expanding the lineup of smashed patty burgers to improve sales and costs, with a focus on delivering high-quality products at quick service restaurant speed.
Limited Time Offers: Launched the West Slope Double burger and a seasonally featured fish sandwich made with Atlantic cod.
Market Expansion: Acquired two Good Times restaurants from a former franchisee in Northern Denver, with plans for remodeling and updates.
Sales Performance: Bad Daddy's reported a 1.5% increase in same store sales, while Good Times experienced flat same store sales.
Operational Improvements: Implemented new cooking procedures and holding standards for burger patties, resulting in improved product quality.
Labor Cost Management: Achieved a decrease in labor costs at Bad Daddy's due to higher sales and improved labor productivity.
Strategic Focus: Shifted focus from speed at all costs to delivering high-quality products, aligning management compensation with restaurant performance.
Advertising Strategy: Experimenting with audio-based advertising and video streaming services to reach a younger audience.
Market Risks: The company faces risks related to the market price of its stock and the nature of other investment opportunities, which may affect its financial performance.
Public Health Risks: Disruptions to business from pandemics and other public health emergencies pose significant risks.
Staffing Challenges: Staffing constraints at restaurants are impacting operations and service quality.
Supply Chain Issues: Supply chain constraints and inflation are affecting food and packaging costs, with expectations of continued increases in ground beef costs due to tightening supply.
Regulatory Risks: Changes in federal, state, or local laws and regulations, including wage and tip credit regulations, could impact operational costs.
Economic Factors: General economic conditions and operating conditions are uncertain and may affect sales and profitability.
Competition: Increased competition and aggressive discounting by competitors are challenging the company's market position.
Development Risks: Uncertainty regarding current restaurant development plans and potential delays in opening new locations due to weather or local permitting issues.
Legal Risks: Ongoing legal cases may pose risks, with no clear timeline for resolution.
Labor Costs: Rising labor costs due to minimum wage increases and decreased labor productivity are expected to impact profitability.
Occupancy Costs: Increased occupancy costs due to lease extensions, rent escalations, and property tax increases are affecting overall expenses.
Same Store Sales: Bad Daddy's posted a 1.5% increase in same store sales for the quarter.
Menu Engineering: Plans to expand the lineup of smashed patty burgers to improve sales and costs.
Operational Improvements: Implemented new cooking procedures and holding standards for burger patties to enhance product quality.
Remodeling Initiatives: Remodeled two Good Times restaurants and planned further renovations to enhance competitiveness.
Marketing Strategy: Experimenting with audio-based advertising and YouTube pre-roll advertising to attract a younger audience.
Revenue Expectations: Expect ground beef costs to continue to increase throughout fiscal year 2025.
Labor Costs: Anticipate higher labor costs in the second quarter due to minimum wage increases and weather impacts.
CapEx: Budget approximately 1% of sales for ongoing maintenance CapEx, with $900,000 incurred in the first quarter.
Share Repurchase Program: Continue to repurchase shares while balancing other capital needs.
General and Administrative Expenses: Expect to maintain approximately 7% general and administrative costs on a full year basis for fiscal 2025.
Share Repurchase Program: During the quarter, Good Times Restaurants Inc. repurchased 59,125 shares under their share repurchase program. The company plans to continue share repurchases, balancing this with other capital needs.
The earnings call revealed disappointing financial results with decreased revenues, increased costs, and a net loss. Despite some optimistic guidance for fiscal 2026, the lack of Q&A engagement and absence of a clear shareholder return plan add to uncertainty. The negative sentiment is compounded by regulatory challenges and operational cost increases, leading to a likely negative stock reaction.
The earnings call reveals several concerns: decreased sales, increased costs, and underperformance of the Good Times concept, despite some positive aspects like improved net income and cash reserves. The Q&A highlights management's reluctance to provide forward guidance, contributing to uncertainty. Despite strategic shifts and potential future projects, the immediate outlook appears challenging, leading to a likely negative stock reaction.
The earnings call reveals a mix of challenges and strategic efforts. Financial performance was weak, with declining sales and increased costs, particularly in labor and food. The Q&A section highlighted management's commitment but lacked clarity on addressing operational challenges. The temporary pause in share repurchases and increased costs, coupled with a net loss, suggest negative sentiment. Despite some strategic initiatives, the overall outlook is challenging, leading to a negative stock price prediction.
The earnings call presents a mixed picture. Record revenue and improved net income are positive, while rising costs and flat same-store sales present challenges. The share repurchase program is a positive signal, but the lack of clear guidance on the legal case and location expansion limits optimism. The Q&A reveals cautious sentiment from analysts, especially regarding cost management and growth strategy. These factors balance each other out, suggesting a neutral stock price movement.
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