Good Times Restaurants Inc. Q3 2026 Earnings Call Summary

Strategic Performance Drivers

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• Good Times same-store sales shifted to positive year-over-year growth, a trend management noted has sustained into the fourth fiscal quarter.

• The $2 Bambino slider promotion drove mid-single-digit same-store sales in June by offering a fun, customizable value proposition distinct from the brand's larger burger format.

• Management observed that while the Bambino became the largest single burger item purchased, guests are supplementing these orders with other items, leading to growth in average check and transactions.

• Bad Daddy's performance was softer, impacted by fewer operating weeks and reduced customer traffic, though partially mitigated by a 2.5% menu price increase.

• Operational efficiency at Good Times improved restaurant-level operating profit by 150 basis points to 13%, aided by increased labor efficiency and reduced waste.

• The company is leveraging a new learning management system to enhance team member salesmanship and hospitality as a core strategy for traffic recovery.

Outlook and Strategic Initiatives

• Management is considering extending the $2 Bambino pricing beyond the original summer window due to its success in driving traffic and sales.

• Bad Daddy's plans to introduce a sampler platter and a new Power Bowl featuring ahi tuna to the core menu in the first quarter of fiscal 2027.

• The company is not planning further price increases for the balance of the year at Good Times, citing the current competitive market environment.

• General and administrative expenses are projected to remain between 6% and 7% of total revenues for the full fiscal year 2026.

• Future growth at Bad Daddy's will rely on a monthly cadence of limited-time offers and 'fan favorite' returns to stimulate guest interest.

Financial and Risk Factors

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• The company successfully paid down its revolving credit facility during the quarter, ending with a strong cash balance and only $0.3 million in seller-financed debt.

• Labor costs at Good Times were impacted by inflation-indexed minimum wage increases in Denver and the state of Colorado, though these were offset by efficiency gains.

• Bad Daddy's restaurant-level profit margins remained steady at 14.4% despite traffic headwinds, supported by improved non-beef protein costs.

• Occupancy costs increased, primarily driven by higher property taxes, while utility cost increases were noted within other operating costs.