Good Times Restaurants (NASDAQ:GTIM) reported fiscal first-quarter 2026 results that management said showed sequential improvement in sales trends at both of its concepts, even as same-store sales remained negative for the period. On the call, CEO Ryan Zink said the company delivered “marginally better” net income and approximately the same adjusted EBITDA as the prior-year quarter despite having one fewer week in the fiscal calendar.
Sales trends improved sequentially, but weather disrupted Bad Daddy’s
Zink said comparable sales at both brands improved from the prior quarter and that underlying sales trends have continued to improve into the second quarter. He also highlighted significant weather impacts in the Southeast, where Winter Storm Fern and another concentrated storm in North Carolina affected the Bad Daddy’s system.
Operational changes at Good Times and menu initiatives at Bad Daddy’s
At Good Times, Zink said the company completed a transition in January to a cook-to-order process, aimed at improving freshness and quality compared to cooking and holding burger patties in advance. He said the company selected a new beef manufacturer to provide fresh 100% Angus patties that work with existing grills while still targeting speed of service “under 3 minutes” from order to drive-thru window departure. Zink added that patty size was increased by about 10% without an incremental cost increase.
He also discussed early traction from an updated loyalty program, powered by a partnership with Thanx. While the program’s points-and-rewards design did not change, Zink said a technology and user experience update has lifted the “loyalty attachment rate” — the percentage of sales attributable to loyalty members — from about 3%–4% under the prior program to above 7% after two months, with the highest performing restaurants exceeding 10%. Zink said the company views the program’s biggest benefit as enabling better guest understanding and segmentation to support more targeted messaging.
At Bad Daddy’s, Zink said the company rolled out its “final” multi-month limited-time offer in January, featuring two regionally inspired burgers and a Mediterranean protein bowl. He said guest feedback has been positive, and that the protein bowl is outperforming the chain’s signature salads. Management expects to add the protein bowl to the core menu in April after a brief hiatus when the limited-time offer ends.
The April core menu update is also expected to include the return of the Elote dip from last summer’s limited-time promotion and the addition of a Giant Bavarian pretzel, which Zink said was the top-selling appetizer during the most recent fall limited-time offer.
Separately, management said Bad Daddy’s is shifting to a Burger of the Month platform beginning in March to provide more flexibility for promotions with shorter shelf lives than an 8-to-10-week limited-time offer. Zink also referenced the GLP-1 trend as potentially longer-lived than a short-term fad, and said the company expects to lean more into its smash burger lineup in promotions or future core menu items, while continuing to serve its existing pub-style burger offering.
Zink said Bad Daddy’s has also launched a brand study to refresh research on guest perceptions across demographic and psychographic profiles. He said the work is expected to be completed during the second fiscal quarter and to influence product and promotional decisions starting in the third quarter.
Quarterly results: revenue down, margins helped by cost controls
Chief Accounting Officer Keri August said total revenues decreased about 10% to $32.7 million for the quarter.
At Bad Daddy’s, total restaurant sales decreased $2.9 million to $23.2 million, which August said was primarily due to an additional week in the prior-year quarter, the closure of one restaurant in the fourth quarter of fiscal 2025 and another closure in the current quarter, partially offset by menu price increases. Bad Daddy’s same-store sales decreased 1.2%, which August called a significant improvement versus the prior quarter. There were 37 Bad Daddy’s restaurants in the comp base at quarter end.
August said Bad Daddy’s average menu price was 1.7% higher than the first quarter of fiscal 2025. The company increased core menu prices by a blended 2.3% early in fiscal 2026, and moving away from $8 margaritas added another 1% of blended price impact, resulting in overall year-over-year food and beverage pricing that was “in aggregate, flat to a year ago.” Management expects another menu price increase of about 1.1% in April and expects the benefit of rolling over the $8 margarita promotion beginning in May.
Bad Daddy’s food and beverage costs were 30.2% of sales, improving by 130 basis points from the prior-year quarter. August attributed the improvement primarily to recipe portion and waste controls and favorable chicken and cheese prices, partially offset by higher beef, bacon, and bison purchase prices. She said beef and bacon costs have been lower so far in the second quarter.
Bad Daddy’s labor costs were 34.5% of sales, down 60 basis points year over year. August said the decrease was primarily due to reduced incentive compensation and other employee benefit costs, partially offset by lower labor productivity from sales deleverage and higher wage rates needed to attract qualified employees. She also reiterated that Colorado’s minimum wage increased to $15.16 and tipped minimum wage to $12.14.
Restaurant-level operating profit for Bad Daddy’s was about $3.2 million, or 13.7% of sales, compared with $3.4 million, or 13% of sales, last year. August said margin improvement as a percentage of sales was primarily driven by favorable food and labor costs.
At Good Times, company-owned restaurant sales decreased by about $0.7 million to $9.2 million. Same-store sales declined 3.1%, which August said was a notable improvement from the prior quarter. There were 27 Good Times restaurants in the comp base at quarter end.
Average menu price at Good Times was approximately 0.7% higher than the prior-year quarter. The company took a small increase in the first quarter and expects another increase of about 1% in late February. August said the company has expanded to three pricing tiers based on testing and price elasticity, and expects year-over-year menu pricing to be about 1.7% higher following the February increase. She said management plans to continue a “surgical approach” with multiple smaller adjustments rather than broad price increases.
Good Times food and packaging costs were 30% of sales, improving by 100 basis points, driven by recipe portion and waste controls and lower chicken and egg prices, partially offset by higher beef and bacon costs. Labor costs were 35% of sales, improving by 170 basis points due to increased labor efficiency, partially offset by higher wages.
Good Times restaurant-level operating profit was flat at $0.9 million, and margin increased 110 basis points to 10.3%, primarily due to favorable food and labor costs.
Profitability, liquidity, and capital priorities
August said combined general and administrative expenses were $2.1 million, or 6.3% of total revenues, improving by 80 basis points from the prior-year quarter due to decreased multi-unit supervision costs, health insurance underwriting costs, and technology costs. The company anticipates full-year G&A in the 6%–7% range for fiscal 2026.
Net income attributable to common shareholders was $0.2 million, or $0.02 per share, matching the prior-year quarter. Adjusted EBITDA was $1.3 million in both the first quarter of fiscal 2026 and fiscal 2025. The company ended the quarter with $3.3 million in cash and $1.8 million of long-term debt.
In the Q&A session, Zink was asked about capital deployment following the company’s purchase of the remaining Good Times franchises and amid positive EBITDA. Zink said the company’s first priority is to pay down remaining debt and that management views the economic environment as “a bit unpredictable,” preferring to maintain cash and liquidity. He said a second priority would be building additional cash, followed by resuming share repurchases. Zink added that Bad Daddy’s development remains a priority and that the company continues to evaluate sites, noting it is “pretty picky” and that any current evaluations are in the early stages.
In closing remarks, Zink said he was encouraged by continued improvement in sales trends at both brands and credited leaders and team members across the organization for the progress.
About Good Times Restaurants (NASDAQ:GTIM)
Good Times Restaurants International, Inc (NASDAQ: GTIM) owns, develops, operates and franchises quick-service restaurants under the Good Times Burger & Frozen Custard brand. The company’s restaurants feature a signature menu built around hand-pressed, fresh-never-frozen beef burgers, homemade buns, fresh-cut fries, handcrafted milkshakes and frozen custard desserts. Good Times supplements its core offerings with seasonal items and limited-time promotions designed to appeal to a variety of customer tastes.
Founded in 1987 and headquartered in Lakewood, Colorado, Good Times has expanded through a mix of company-owned locations and franchising agreements.
