8-K: Good Times Restaurants Reports Mixed Fiscal 2025 Results

Good Times Restaurants Inc. reported a 0.5% decrease in total revenues to $141.6 million for fiscal year 2025, alongside a net income of $1.0 million, despite same-store sales declines across both its brands.

Summary

• Total Revenues decreased 0.5% to $141.6 million for the fiscal year ended September 30, 2025, compared to the previous fiscal year.
• Net Income Attributable to Common Shareholders was $1.0 million for the fiscal year, but a Net Loss Attributable to Common Shareholders of $3 thousand was recorded for the fourth quarter.
• Adjusted EBITDA was $4.3 million for the fiscal year, but ($0.1) million for the fourth quarter.
• Same Store Sales for Good Times restaurants decreased 6.6% for the fourth quarter and 5.0% for the fiscal year.
• Same Store Sales for Bad Daddys restaurants decreased 4.6% for the fourth quarter and 2.1% for the fiscal year.
• Bad Daddys restaurants in markets outside of Colorado showed greater resilience, with same-store sales performing nearly 100 basis points better than consolidated results and 300 basis points better than Colorado results.
• Sequential Same Store Sales improvement has been observed during the first quarter of fiscal 2026 at both concepts, particularly for Bad Daddys in Colorado.
• Management is focused on increasing Same Store Sales and improving restaurant-level margins for Good Times, and has adjusted advertising and promotional strategies for both brands, including streaming video and a new 'Colorado Native Burgers' campaign for Good Times.
• Bad Daddys plans to introduce a Mediterranean Power Bowl, regional burger specials, and a 'Burger of the Month' platform starting in March.

Sentiment

Score: 4

Explanation: While the company achieved a net income for the fiscal year, it experienced declines in total revenues and significant negative same-store sales across both brands, particularly in the fourth quarter. Adjusted EBITDA was negative in Q4. Management acknowledges a difficult 2025 but expresses optimism for fiscal 2026 due to sequential sales improvements in Q1 2026 and new strategic initiatives. The overall sentiment is cautious due to past performance but with a forward-looking positive bias based on planned actions.

Positives

• Net Income Attributable to Common Shareholders was $1.0 million for the fiscal year ended September 30, 2025.
• Adjusted EBITDA was $4.3 million for the fiscal year.
• Bad Daddys restaurants in markets outside of Colorado exhibited greater resilience in sales, outperforming consolidated results by nearly 100 basis points and Colorado results by nearly 300 basis points.
• Sequential Same Store Sales improvement has been observed during the first quarter of fiscal 2026 at both concepts, with Bad Daddys in Colorado showing specific improvement.
• Management is implementing new advertising and promotional strategies, including streaming video and a new branding campaign for Good Times ('Colorado Native Burgers').
• Bad Daddys plans to introduce new menu items like a Mediterranean Power Bowl and a 'Burger of the Month' platform to drive customer appeal.

Negatives

• Total Revenues decreased 0.5% to $141.6 million for the fiscal year compared to the previous fiscal year.
• Total Restaurant Sales for company-owned restaurants decreased $2.0 million to $33.6 million for the fourth quarter and $0.9 million to $140.6 million for the fiscal year.
• Good Times same-store sales decreased 6.6% for the fourth quarter and 5.0% for the fiscal year.
• Bad Daddys same-store sales decreased 4.6% for the fourth quarter and 2.1% for the fiscal year.
• Net Loss Attributable to Common Shareholders was $3 thousand for the fourth quarter.
• Adjusted EBITDA was ($0.1) million for the fourth quarter.
• The second half of fiscal 2025 marked weakness in sales at both brands.
• Cash and Cash Equivalents decreased from $3,853 thousand to $2,605 thousand year-over-year.
• Current Assets decreased from $6,557 thousand to $5,254 thousand year-over-year.
• Total Assets decreased from $87,118 thousand to $83,807 thousand year-over-year.
• Restaurant-level operating profit for Bad Daddys decreased from 12.9% to 12.3% for the fiscal year.
• Restaurant-level operating profit for Good Times decreased from 13.7% to 9.0% for the fiscal year.

Risks

• The market price of the Company's stock prevailing from time to time.
• The nature of other investment opportunities presented to the Company.
• Disruption to business from pandemics and other public health emergencies.
• The impact and duration of staffing constraints at restaurants.
• The impact of supply chain constraints and the current inflationary environment.
• The uncertain nature of current restaurant development plans and the ability to implement those plans and integrate new restaurants.
• Delays in developing and opening new restaurants because of weather, local permitting or other reasons.
• Increased competition.
• Cost increases or shortages in raw food products.
• Other general economic and operating conditions.
• Risks associated with the acquisition of additional restaurants.
• The adequacy of cash flows and the cost and availability of capital or credit facility borrowings to provide liquidity.
• Changes in federal, state, or local laws and regulations affecting the operation of restaurants, including minimum wage and tip credit regulations.
• Other matters discussed under the Risk Factors section of Good Times Annual Report on Form 10-K for the fiscal year ended September 24, 2024, and other filings with the SEC including the Form 10-K for the fiscal year ended September 30, 2025.

Future Outlook

Management is optimistic that fiscal 2026 will see improved performance for both brands after a difficult 2025. Expectations include increasing Same Store Sales and improving restaurant-level margins for Good Times, specifically in food and beverage costs and restaurant labor costs. New advertising and promotional strategies are being fine-tuned to drive improved traffic. Good Times will launch campaigns featuring value-oriented and unique Colorado heritage items in the second quarter of fiscal 2026. Bad Daddys will feature a Mediterranean Power Bowl and regional burger specials in the fiscal 2026 second quarter, and adopt a 'Burger of the Month' platform starting in March.

Management Comments

• "The second half of the 2025 fiscal year marked weakness in sales at both brands though Bad Daddys exhibited greater resilience in markets outside of Colorado, where for both the year and the quarter same store sales performed better than the consolidated results by nearly 100 basis points and better than the Colorado results by nearly 300 basis points." Ryan M. Zink, CEO.
• "We have seen sequential Same Store Sales improvement during the first quarter of fiscal 2026 at both concepts, and at Bad Daddys, most specifically in the Colorado restaurants." Ryan M. Zink, CEO.
• "Our Good Times team is laser-focused on increasing Same Store Sales while at the same time improving restaurant-level margins, which we expect both in food and beverage cost as well as in restaurant labor costs." Ryan M. Zink, CEO.
• "We have adjusted our advertising and promotional strategies at both brands and will continue to fine-tune those to better reach our guests and drive improved traffic to our restaurants." Ryan M. Zink, CEO.
• "I am optimistic that fiscal 2026 will see improved performance for both brands after a difficult 2025." Ryan M. Zink, CEO.
• "Our leadership teams are committed to delivering better results that we believe starts with understanding our guests interactions with our brands while taking swift action to meet their changing needs and communicate the superior food, beverage, and service that both of our brands provide compared to our competitors." Ryan M. Zink, CEO.

Industry Context

The filing indicates a challenging environment for the restaurant industry, with 'weakness in sales' across both brands in the second half of fiscal 2025. This aligns with broader trends of consumer spending shifts and inflationary pressures impacting the casual dining and quick-service sectors. The focus on value-oriented items, unique offerings, and targeted advertising reflects common strategies employed by restaurant chains to combat declining traffic and maintain market share in a competitive landscape. The resilience of Bad Daddys outside Colorado suggests regional variations in consumer behavior or competitive intensity.

Comparison to Industry Standards

• The reported same-store sales declines for Good Times (-5.0% for the fiscal year) and Bad Daddys (-2.1% for the fiscal year) suggest underperformance relative to a healthy growth environment in the restaurant industry, where positive low single-digit same-store sales growth is typically a key indicator of success.
• The company's efforts to improve margins and drive traffic through new marketing and menu items are standard industry responses to such challenges, indicating alignment with common strategies to address market headwinds.

Stakeholder Impact

• Shareholders: Negative impact from declining same-store sales and a net loss in Q4, but positive from full-year net income. Future performance depends on the success of new strategies.
• Employees: Focus on improving restaurant-level margins, including labor costs, could imply pressure on staffing or wages, though not explicitly stated.
• Customers: New advertising campaigns, value-oriented items, and unique menu offerings (e.g., Mediterranean Power Bowl, Burger of the Month) are aimed at attracting and retaining customers.
• Suppliers: Potential impact from cost increases or shortages in raw food products, as mentioned in risks.

Next Steps

• Good Times team to focus on increasing Same Store Sales and improving restaurant-level margins (food and beverage cost, restaurant labor costs).
• Continue to fine-tune advertising and promotional strategies to better reach guests and drive improved traffic.
• Good Times to kick off campaigns featuring value-oriented items and items unique to its Colorado heritage in the second quarter of fiscal 2026.
• Bad Daddys to feature a Mediterranean Power Bowl and two separate regional burger specials in the fiscal 2026 second quarter.
• Bad Daddys to adopt a 'Burger of the Month' platform beginning in March.
• Leadership teams committed to understanding guest interactions and taking swift action to meet changing needs.

Key Dates

Recommendation

The company reported a challenging fiscal year 2025 with declining revenues and negative same-store sales across both brands, culminating in a net loss for the fourth quarter. While full-year net income was positive, the operational headwinds are significant. Management acknowledges these difficulties and has outlined several strategic initiatives, including new marketing campaigns and menu innovations, which are expected to drive sequential sales improvement in fiscal 2026. The observed sequential improvement in Q1 2026 provides a glimmer of hope. However, given the recent performance and the competitive nature of the restaurant industry, a 'hold' recommendation is appropriate. Investors should monitor the execution and impact of these new strategies and the company's ability to reverse the negative sales trends before considering a stronger position. The stock carries inherent risks related to market conditions, competition, and operational execution.

Keywords

Restaurant, Fast Casual, Burgers, Frozen Custard, Bad Daddys Burger Bar, Good Times Burgers & Frozen Custard, GTIM, Financial Results, Earnings, Same Store Sales, Adjusted EBITDA, SEC Filing, Q4 2025, Fiscal Year 2025, Nasdaq