8-K: Good Times Restaurants Inc. Reports Mixed Same-Store Sales for Second Fiscal Quarter

Good Times Restaurants Inc. announced a 0.9% increase in same-store sales for its Good Times brand and a 3.2% decrease for its Bad Daddys brand in the second fiscal quarter of 2024.

Summary

• Good Times Restaurants Inc. reported its second fiscal quarter same-store sales results on April 11, 2024.
• The Good Times brand saw a 0.9% increase in same-store sales compared to the same quarter last year.
• The Bad Daddys brand experienced a 3.2% decrease in same-store sales over the same period.
• Average weekly sales for Good Times were $27,133, while Bad Daddys averaged $50,880.
• The company noted that unfavorable weather impacted sales, particularly in Colorado.
• Bad Daddys same-store sales decline improved compared to the first fiscal quarter.
• The company highlighted a strong March performance despite weather challenges.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive due to the mixed results, with the Good Times brand performing well but Bad Daddys experiencing a decline. The sequential improvement in Bad Daddys is a positive sign, but the overall performance is not overwhelmingly positive.

Positives

• The Good Times brand demonstrated positive same-store sales growth of 0.9%.
• There was a sequential improvement in Bad Daddys same-store sales decline compared to the first fiscal quarter.
• The company saw a strong sales performance in March, indicating a positive trend.

Negatives

• The Bad Daddys brand experienced a 3.2% decrease in same-store sales.
• Unfavorable weather conditions negatively impacted sales for both brands, particularly in Colorado.

Risks

• The company faces risks related to weather conditions impacting sales.
• The company is exposed to general economic and operating conditions.
• The company is exposed to risks associated with the share repurchase program.
• The company is exposed to risks associated with the acquisition of additional restaurants.
• The company is exposed to risks associated with the adequacy of cash flows and the cost and availability of capital or credit facility borrowings to provide liquidity.
• The company is exposed to risks associated with changes in federal, state, or local laws and regulations affecting the operation of our restaurants, including minimum wage and tip credit regulations.

Future Outlook

The company's forward-looking statements are subject to various risks and uncertainties, including market conditions, operational challenges, and economic factors.

Management Comments

• Ryan Zink, President and CEO, stated that the strength of the Good Times brand is evident from the sales performance.
• Ryan Zink noted that the sequential improvement in Bad Daddys same-store sales is encouraging.
• Ryan Zink believes the top line results demonstrate the success of their strategies at both concepts.

Industry Context

The restaurant industry is facing challenges such as unfavorable weather and changing consumer preferences, which are impacting sales performance. The company's results reflect these broader trends, with the casual dining space experiencing a weak January followed by improving trends.

Comparison to Industry Standards

• The company's Good Times brand's 0.9% same-store sales increase is a positive result in the current environment, where many restaurants are struggling with flat or declining sales.
• The 3.2% decline in Bad Daddys same-store sales is concerning, but the sequential improvement suggests that the company's operational changes may be starting to have a positive impact.
• Comparing to other publicly traded restaurant companies, such as Shake Shack (SHAK) or The Wendy's Company (WEN), the results are mixed. Shake Shack has shown stronger same-store sales growth in recent quarters, while Wendy's has faced similar challenges to Bad Daddys.
• The average weekly sales figures of $27,133 for Good Times and $50,880 for Bad Daddys are within the range of other similar quick-service and casual dining concepts, but the company needs to focus on improving sales at Bad Daddys to reach industry benchmarks.

Stakeholder Impact

• Shareholders may have mixed reactions to the results, with the Good Times performance being positive and the Bad Daddys performance being negative.
• Employees may be impacted by the performance of the Bad Daddys brand, potentially affecting job security or compensation.
• Customers may experience changes in service or menu offerings as the company implements operational changes.
• Suppliers may be affected by changes in demand based on the sales performance of the two brands.

Key Dates

Keywords

same-store sales, restaurant, Good Times, Bad Daddys, weekly sales, quick-service, casual dining, GTIM