In This Article:
Release Date: December 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Good Times Restaurants Inc (NASDAQ:GTIM) reported a 4.3% increase in total revenues for the quarter, reaching a new all-time record of $142.3 million for fiscal 2024.
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Bad Daddy's brand saw a strong increase in same-store sales by 3.2% for the quarter, driven by operational improvements and new menu items.
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The introduction of the Smash Patty burgers at Bad Daddy's was successful, becoming a top menu item and contributing positively to sales and margins.
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The company has been actively remodeling and acquiring franchise locations to ensure operational excellence and brand continuity.
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Good Times Restaurants Inc (NASDAQ:GTIM) expanded its share repurchase program, indicating confidence in the company's value and providing flexibility for capital allocation.
Negative Points
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Good Times brand experienced a slight decline in same-store sales, with a 0.1% decrease, attributed to escalating beef prices and competitive discounting.
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The company faced increased costs in food and packaging, labor, and occupancy, impacting overall profitability.
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Despite revenue growth, Good Times Restaurants Inc (NASDAQ:GTIM) reported a decrease in restaurant-level operating profit for the Good Times brand.
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The company's marketing strategy faced challenges, with audio-based advertising reductions not yielding the expected results.
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There is uncertainty in the commodity market, particularly with ground beef prices, which could continue to impact cost structures.
Q & A Highlights
Q: Can you provide more details on the performance of Bad Daddy's and the impact of the new menu items? A: Ryan Zink, CEO, explained that Bad Daddy's saw a strong increase in same-store sales and improved margins. The introduction of the Smash Patty burgers as a permanent menu item was a significant success, becoming a top-five menu item. The new items have been well-received, contributing to the brand's positive momentum.
Q: What challenges did Good Times face this quarter, and how are you addressing them? A: Ryan Zink, CEO, noted that Good Times experienced challenges due to escalating beef prices and intense discounting by competitors, leading to slightly negative same-store sales. The company is focusing on product improvement and innovation rather than deep discounting, with new menu items like the Bambino Supremo sliders.
Q: How is the company handling the current economic pressures, such as inflation and supply chain issues? A: Carrie August, SVP of Finance and Accounting, stated that the company is managing these pressures by focusing on operational efficiencies and strategic pricing. They have implemented a modest price increase and are monitoring commodity markets closely to adjust as needed.