On December 12, 2024, Good Times Restaurants Inc (GTIM, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year ended September 24, 2024. Good Times Restaurants Inc is engaged in developing, owning, operating, and franchising hamburger-oriented drive-through restaurants. It operates through two segments: Good Times Burgers and Frozen Custard restaurants, and Bad Daddy's Burger Bar restaurants, with the latter generating the maximum revenue for the company.
Performance Overview and Challenges
Good Times Restaurants Inc reported a 3.0% increase in total revenues, reaching $142.3 million for the fiscal year compared to the previous year. The company's performance was marked by a mixed outcome across its segments. Total restaurant sales for company-owned Good Times restaurants rose by $0.5 million to $10.0 million in the fourth quarter, and by $3.0 million to $38.0 million for the year. However, same-store sales for Good Times restaurants saw a slight decline of 0.1% in the fourth quarter, although they increased by 2.9% for the year.
In contrast, Bad Daddy's restaurants experienced a $1.0 million increase in total restaurant sales to $25.6 million for the fourth quarter, and a $1.3 million increase to $103.5 million for the year. Same-store sales for Bad Daddy's rose by 3.2% in the fourth quarter but decreased by 1.2% for the year. The performance of Bad Daddy's was notably strong, outperforming the Black Box casual dining index for both sales and traffic during the quarter.
Financial Achievements and Strategic Insights
The company's strategic focus on brand execution and operational excellence has been pivotal. Ryan M. Zink, the CEO, emphasized the effectiveness of the back-to-basics approach at Bad Daddy’s, which has been instrumental in attracting and retaining guests. He noted,
I am inspired by the turnaround in same store sales this year at Bad Daddy’s, a strong indication that our back-to-basics approach to brand execution is effectively attracting and retaining guests at our restaurants."
Despite facing competitive pressures in the quick-service space, particularly from larger competitors engaging in extreme discounting, Good Times remains committed to delivering value through high-quality products. Zink remarked on the challenges, stating,
History has shown that exaggerated discounting is a race to the bottom and an unprofitable strategy in the long-term, so we are choosing a different path."
Key Financial Metrics and Analysis
Good Times Restaurants Inc's financial statements reveal important metrics that are crucial for evaluating its performance. The company announced a $2 million expansion of its share repurchase program, bringing the total authorization to $7 million. This move reflects confidence in the company's financial health and commitment to returning value to shareholders.
| Metric | Q4 2024 | Fiscal Year 2024 |
|---|---|---|
| Total Revenues | - | $142.3 million |
| Good Times Restaurant Sales | $10.0 million | $38.0 million |
| Bad Daddy's Restaurant Sales | $25.6 million | $103.5 million |
The company's focus on operational efficiency is evident in its use of non-GAAP measures such as restaurant-level operating profit and Adjusted EBITDA. These metrics provide insights into the company's operating performance by excluding non-cash charges and other non-recurring items.
Conclusion
Good Times Restaurants Inc's fiscal year 2024 results highlight a year of strategic growth and operational challenges. The company's ability to navigate competitive pressures while maintaining a focus on quality and brand execution will be crucial as it moves forward. The expansion of the share repurchase program further underscores the company's commitment to enhancing shareholder value. Investors and stakeholders will be keenly watching how Good Times leverages its strategic initiatives to drive future growth and profitability.
Explore the complete 8-K earnings release (here) from Good Times Restaurants Inc for further details.
