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

Good Times Restaurants Inc. announced a 4.1% increase in same-store sales for its Good Times brand and a 6.2% decrease for its Bad Daddys brand for the first fiscal quarter ended December 26, 2023.

Summary

• Good Times Restaurants Inc. reported its same-store sales results for the first fiscal quarter ended December 26, 2023.
• The Good Times brand experienced a 4.1% increase in same-store sales compared to the same quarter in the previous year.
• The Bad Daddys brand saw a 6.2% decrease in same-store sales during the same period.
• Despite the challenges, five Bad Daddys locations achieved new single-store weekly sales records.
• The Madison, Alabama Bad Daddys restaurant had its second-highest sales week since opening during the first week of the second fiscal quarter.
• The company is implementing strategies to boost sales, including drink specials, late-night happy hour starting January 17, 2024, and a new cocktail lineup in February.
• New core menu items, including salmon and turkey Non-Burger Burger builds, are planned to expand the price range and offer everyday value.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative due to the mixed results, with positive performance in one brand offset by negative performance in the other. The company is taking action to improve sales, which is a positive sign.

Positives

• The Good Times brand demonstrated positive same-store sales growth of 4.1%.
• Five Bad Daddys locations achieved record weekly sales, indicating potential in certain markets.
• The Madison, Alabama Bad Daddys location had a very strong sales week, showing positive momentum.
• The company is proactively implementing strategies to improve sales, such as new drink specials and menu items.

Negatives

• The Bad Daddys brand experienced a significant same-store sales decrease of 6.2%.
• Bad Daddys sales softened in January after showing improvement in December.
• The company acknowledges challenges facing the Bad Daddys brand.

Risks

• The company faces challenges in the current operating environment.
• The Bad Daddys brand is experiencing sales declines and needs improvement.
• The company is subject to risks related to staffing constraints, supply chain issues, and inflation.
• There are risks associated with the company's restaurant development plans and the ability to integrate new restaurants.
• The company is exposed to risks related to competition, cost increases, and changes in regulations.

Future Outlook

The company plans to launch new drink specials, late-night happy hour, a new cocktail lineup, and new core menu items to drive sales and traffic. They anticipate the addition of new core menu items that will expand the price range covered by their menu.

Management Comments

• Ryan Zink, President and CEO, stated that the Good Times brand has continued to deliver positive same store sales despite a challenging operating environment.
• Ryan Zink noted that Bad Daddys sales during the first quarter reflect the challenges facing that brand.
• Ryan Zink expressed confidence in both brands, reinforced by the sales records achieved at some Bad Daddys locations.

Industry Context

The restaurant industry is facing a challenging operating environment, with some brands experiencing sales declines while others are performing well. Good Times is implementing strategies to improve sales and traffic, which is a common approach in the industry.

Comparison to Industry Standards

• The 4.1% increase in same-store sales for Good Times is a positive result, especially in the current environment, and may be better than some quick-service restaurant competitors.
• The 6.2% decrease in same-store sales for Bad Daddys is a concerning result and may be worse than some full-service restaurant competitors.
• Comparable companies such as Shake Shack (SHAK) and Habit Restaurants (HABT) have reported varying same-store sales results, highlighting the competitive nature of the industry.
• The company's focus on menu innovation and value offerings is a common strategy used by other restaurant chains to attract and retain customers.

Stakeholder Impact

• Shareholders may react negatively to the decrease in same-store sales for the Bad Daddys brand.
• Employees may be impacted by the changes in menu and operations.
• Customers may benefit from the new menu items and promotions.
• Suppliers may be affected by changes in the company's purchasing patterns.

Next Steps

• The company will launch system-wide drink specials and late-night happy hour on January 17, 2024.
• A new cocktail lineup will be launched in February.
• New core menu items will be added to expand the price range and offer everyday value.

Key Dates

Keywords

same-store sales, restaurant sales, Good Times, Bad Daddys, menu, restaurant, food, beverage, sales, GTIM