Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen. Welcome to the Good Times Restaurants Fiscal 2023 First Quarter Earnings Call. By now, everyone should have access to the company’s earnings release, which is available in the Investors section of the company’s website.

As a reminder, a part of today’s discussion will include forward-looking statements within the meaning of federal securities laws. These forward-looking statements are not guarantees of future performance and therefore, you should not put undue reliance on them. and to which expressed differ by forward-looking known company’s cause or involve the results actual materially statements. statements unknown may risks, the implied These from results results price among the from time-to-time, of operations operations cash conditions, company’s other of to economic things, include, financial prevailing presented nature uncertainties which opportunities and affect company, and company’s stock general flows. risks the Such the cash could flows market the of investment performance the from its company’s other and adversely the and for on filed XX-K matters and the XXXX Factors current plans Risk SEC filings in Form Good and extent fiscal September permitting These risks integrate impact implement operations, the to to for the under the COVID-XX restaurants, local Annual and the discussed of development pandemic also the shortages restaurants, prospects, at other behavior the those in include the of and as customer the food of and reasons, of Report increases increased the of other and response inflationary or vary or of restaurant duration other the SEC. condition new plans, ability impact uncertain the the increases financial of such and pandemic nature products chain raw the section federal, of of delays wage our disruption actions employees restaurants opening developing factors environment, state may in and constraints local and new year pandemic governmental with to and pandemic, impact because results on and supply which the current Times weather, our with business our and on XX, impact the constraints from and depending ended staffing cost competition, and the duration

accordance should non-GAAP The will not measures believe of this measures, call, which our information performance. to can additional substitute today’s earnings reconciliation in comparable as for GAAP isolation presentation our in or useful discuss prepared evaluating and the a release. GAAP they with be in in company considered During be available results

And sir. to the Ryan. turn I’d ahead, Please to this at go now call time, like over

Ryan Zink

and all you, on the Thank you joining today. for thank call us Bob

have mentioned, release our everyone XX-Q As should quarter to our first earnings now access and filing.

report brands We this both with pleased are same-store at to another sales quarter. of quarter growth

demonstrated platform We in quality memorable the continue hospitality, highest unparalleled long-term of at of brands Daddy’s, the our experiences many house-made that our believe fries. success each Times both burgers hand-cut our rests and ingredients by our Good all-natural including in French by and our at segments as the of and to industry Bad great customers customization

able year-over-year have manage Daddy’s on our our wild cost along all-natural While pass were fries signature and we we to and beef, of buns to be have Colorado, customer. threshold our of increases continue quarter, Good rather potato have wage at a effectively of comfortable more completely and we minimum labor wages been in state on to where than this able by potato increasing that poppers the were Bad we sales finished particularly Further, are to passing at customer the the costs, beyond forces concepts to up combination the market also Times. the both both driven taken challenged including jalapeno products, legislation

favorable tracking to metrics believe decisions long-term will the indices we strategy of the that growth each of are traffic and compromise the continued manifest in margin create, our While these strong trends we success appreciate for these operating be sales segments.

in wages. starting decreases to That so We the rates the market labor we have are said, return are to some expecting anything and the to don’t believe labor offset restaurant pre-pandemic expecting improved resembling that productivity market future. its been but we rationalization are year-over-year, state. not and sufficiently Our has wage level in though increasing not to in see

conscientious candidates benefits is tech rates. expect to as ultimately effect and our productivity major for pool layoffs in We improve decreased be the life of recent borne by open labor of market eventually through to and it employees, tough improvements through and managers in been. companies labor by for rather industry the the always industry wage and our restaurant committed, has to cascade will employees This the doors more a quality waterfall than through a

concepts Just with strong has retention At our dealt our same more the like turnover highly before. with most culture managers amongst call-offs some skilled ever and no time, created industry, by long-term customer-focused have in lower managers other the top-performing of than employees. and our and our notice driven

our be continue we Installing to both first old. businesses, are, at of lane in the menu end, cases, Aurora, XX on commitment in of other businesses. and at monument our during some To projects board to bullish restaurants in XX signs of demonstrate signs restaurants in quarter. replace suburb to our building at to the Good that to our We having one first Times Times projects having our and continue several that both new underway Denver, completed timer Good reinvesting years

to project We’re of the last nearing the launch launched our mobile complement year. that loyalty apps

that concessionaire. one of last with Daddy’s the associated restaurants individuals the by we were now of owned interest operated founder. owned plus us, Airport announced this – Bad restaurant acquisition Daddy’s the in traditional by Bad in are our At all XXX% acquisition, Daddy’s five previously an licensed that’s original Bad Charlotte week, the experienced With by

equity acquired, flow a of credit single our the terms administrative In non-controlling managing addition to within interest in removes Good Times partnership reduces business. and cash to complexity, advantageous this purchase is the

make late Huntsville summer on good we progress new restaurant we in continue to expect Greater the Further, which in to XXXX. open our area,

the for future. of am for and begin During we the restaurant remainder year. and potential about into from to concepts, last the of Bad the thrilled Daddy’s purchased both March, that remodel complete XXXX franchisee Greenville expect also both we our I the

it this pass to Matthew review over now to quarter’s results. I’ll

Matthew Karnes

to still to plus you, to is million $X.X $XX.X year price increased for million due million $XX.X the quarter. Total XX Total Thank the sales the at $X.X in during continued over X.X% increased XX.X% Ryan. quarter. sales. Total of Bad prior the at increased menu for quarter. X.X% comp we quarter the improvement will quarter, XX inflationary sales the but last increase Daddy’s year. throughout increased chain the hopefully, see significantly restaurants showing of Bad revenues Cost quarter. supply basis for from pressures, to million end restaurant X.X% Daddy’s, decrease costs Daddy’s the and with for for restaurant average the same the of food were a increases base year’s million strength continued $XX.X This the sales high seen packaging approximately of Same-store off-premise sales through quarter, point quarter. and That’s Bad as

basis primarily higher costs prior XX Bad of Bad attract costs, to to and XX points utilities other to fees. due by points X.X% rates payroll compared XX% operating wage This property assessments. in qualified quarter, was for basis Daddy’s due and primarily increased as compared XX.X% costs quarter maintenance increases service the a to higher This employees. year on sales XX by increase to increased and percentage that’s spending year prior basis increased Daddy’s to labor for increased Occupancy quarter. at to points restaurant Bad the reflects the increase technology repair the quarter. increased cost tax Daddy’s expenses,

increased million profit $X.X XX.X% a approximately XX.X% costs. or restaurant-level of to The is of Daddy’s cost $X.X other operating year. Bad the quarter Overall, and for sales non-GAAP primarily decline restaurant compared to or labor measure the was million due for operating last

XX.X% XX.X% increase primarily at sales delivery XX.X% costs offset basis an increased That’s prices. pressures service approximately price to increase higher Good XXX prior and property charges, last year year the X.X% points the Occupancy and increase XXX year from costs. for additional to Times liability $X.X of a increased packaging million. from for quarter, talented were at over due of X.X%, quarter to attract same-store quarter, average general experienced from XX Good increased the Good Times higher basis and Food quarter. insurance for and Times’ operating for inflation slightly wage packaging XX.X% was due and Good for other costs accompanying employees. were metro materials, Again, Restaurant higher Denver an decrease the at an a the the across compared $X same to quarter, Good were delivery that’s cost. to price average quarter. supply primarily were to the points area Times and rates food sales year’s significant sales Times the of due inflationary Total The mix result menu quarter. X% basis costs last and and the for increase primarily million, prior quarter of menu on points labor of costs of

Times $X.X million. Good for operating quarter the to profit decreased $X.X million restaurant-level by

percent XX.X% general $X.X percent quarter recruiting to payroll Combined quarter. fees, decrease This a year were to prior previously and as the due was last X.X% supervisory primarily multi-unit and costs or represents the and restaurant-level decreased by offset insurance, regional $X.X of expenses. total expenses stock-based decreased mainly of legal points by of a costs, As versus it year G&A operating revenue. to compensation, prior expenses a office year XXX basis sales, million discussed. profit increased decreased home million higher administrative partially versus the due versus benefit during and and

and for last common $X.XX in for quarter shareholders $X.X quarter a first in the compared and million year. $X.X net income shareholders $X.X versus loss no to we cash $X.XX was the of Our or quarter long-term million million with first the share $X.X of Adjusted finished the per was million debt. to per common to the of for share $X.X million XXXX, EBITDA quarter loss or quarter

will I back Ryan. to it hand And

Ryan Zink

can Bob, that, questions. call With Matthew. you, open for the we Thank

Ryan Zink

close ultimate other, thank success Alright, teams. line, passion appreciation are The of call well, our each result enthusiasm front all in am we that, of the you. match opportunity will brands restaurant each differ hire brands and in I today’s the With then do all our the want is customers so and us delighting I will will optimistic in each And the guests. joining employees, you to and about it that I our members commitment for management conclude reiterate specifics my our managers customers. to thank the from our creating his executing team brand. more our for They today. showcasing our of to loyal call. of but our and of doing

Operator

you today’s Again, I all call. a so Mr. earnings of to first wish much that and Goodbye. Again, you joining Thank quarter gentlemen, Good you, remainder would will Zink. Times day. all great conclude ladies us fiscal like your XXXX for Restaurants’ and thank

Ryan Zink	President and Chief Executive Officer
Matthew Karnes	Senior Vice President, Finance

Good Times Restaurants (GTIM) 2 Feb 232023 Q1 Earnings call transcript