Good Times Restaurants Inc. Reports 10% Revenue Decline, Net Income Increase in Latest Quarter

Good Times Restaurants Inc. reported a decline in financial performance for the fiscal quarter ending December 30, 2025, with net revenues decreasing by 10% to $32.7 million, down from $36.3 million in the same quarter of the previous year. The decrease in revenue was attributed to a shorter fiscal quarter this year, as the current quarter consisted of 13 weeks compared to 14 weeks in the prior year. Restaurant sales from the Bad Daddy's concept fell by $2.9 million to $23.2 million, while Good Times restaurant sales decreased by $716,000 to $9.2 million. Despite the revenue drop, net income increased slightly to $198,000 from $174,000, primarily due to reduced operating costs.

The company's operating costs also saw a significant reduction, with total restaurant operating costs decreasing from $32.6 million to $29.1 million. Food and packaging costs dropped by 13.5% to $9.8 million, while payroll and employee benefit costs decreased by 12.3% to $11.2 million. The company attributed these reductions to improved cost management strategies, including recipe portion controls and waste management, as well as favorable pricing on certain commodities. General and administrative costs also fell to $2.1 million from $2.6 million, reflecting a decrease in multi-unit supervisory roles and health insurance costs.

In terms of operational developments, Good Times Restaurants Inc. continues to focus on growth strategies, with a total of 38 Bad Daddy's restaurants and 30 Good Times locations as of December 30, 2025. The company has adopted a more conservative approach to unit growth, emphasizing careful real estate selection amid rising costs and inflation. The company also reported a working capital deficit of $8.2 million, influenced by short-term lease liabilities, but management believes it has sufficient capital to meet operational needs in the upcoming fiscal year.

Looking ahead, Good Times Restaurants Inc. anticipates challenges related to inflation and wage increases, which may impact profitability. The company has historically managed inflation through menu price increases; however, the current wage inflation may limit its ability to pass on costs to customers without affecting demand. The company remains cautious about the competitive landscape and the potential impact of new restaurant openings in proximity to its locations. Overall, while the company faces headwinds, it is committed to leveraging its brand strengths and operational efficiencies to navigate the evolving market conditions.