Executive Summary: Good Times Restaurants Inc. delivered a challenging Q2 2025 as revenue declined and profitability faced material pressure. Reported revenue of $34.28 million declined 3.3% year over year and 5.65% quarter over quarter, with GAAP net income of -$0.62 million and an EPS of -$0.06. Adjusted EBITDA of $1.0 million contrasted with the GAAP net loss, underscoring ongoing cost management initiatives and brand-level margin resilience in a softer operating environment. Cash and cash equivalents stood at $2.71 million, total debt was $42.69 million, and net debt was $39.98 million. Management paused share repurchases to prioritize cash accumulation, debt reduction, remodels, and branding investments. The quarter underscored a consumer environment that is more value- and promotion-oriented, pressure on beef and labor costs, and ongoing implementation of a multi-brand operational strategy aimed at restoring top-line growth and improving guest perceptions of value and quality.
Brand dynamics were mixed. Bad Daddy’s continued to contribute a higher-margin mix with an EBITDA contribution near $3.4 million (13.6% of sales) despite a $1.6 million sequential sales decline to $24.8 million for the quarter, driven by store closures and mix shifts toward higher-margin smashed-patty items. Good Times’ company-owned sales rose modestly to about $9.3 million but suffered a 3.6% same-store decline, with labor and input costs rising (labor 35.6% of sales; food/packaging 30.7%). Management signaled ongoing menu redesigns (shift to shredded lettuce, test-and-rollout of smash burgers, softer buns), a new custard base, and the June launch of fried ice cream, all intended to lift value perception and drive guest visits. The company is prioritizing cost discipline, remodel activity, and a more targeted digital marketing strategy (connected TV, social, search) over traditional radio promotions, with further geographic testing planned in the Denver market. Given beef supply dynamics and wage pressures, GTIM expects higher beef costs through FY2025 and shares a cautious near-term outlook, including continued elevated labor costs as new-hire training continues. Overall, the quarter reinforces a path toward improved product quality, better kitchen execution, and a more differentiated value proposition, albeit with a still-challenging near-term earnings trajectory.