Good Times Restaurants Q2 2025: Unpacking Contradictions in Menu Strategy, Sales Performance, and Cost Management

Menu and product strategy, sales and same-store sales performance of Bad Daddy's, profitability and cost management at Good Times, menu pricing strategy, and seasonality and weather impact are the key contradictions discussed in Good Times Restaurants' latest 2025Q2 earnings call.



Challenging Sales Environment:
- Good Times Restaurants, Inc. reported a 3.5% decrease in same-store sales for both brands during the second fiscal quarter.
- The decline is attributed to a value-oriented customer base and a challenging operating environment similar to other concepts in the segment.

Focus on Value Perception and Operational Improvements:
- The company is introducing new burger builds and testing a new burger process, aiming to improve value perception through better bun coverage and visibility of beef.
- These changes are part of a broader strategy to enhance product quality and consistency through improved operational execution by Craig Soto, the newly appointed Director of Operations.

Bad Daddy's Menu Engineering and Profitability:
- Bad Daddy's achieved a higher profitability during the quarter, with restaurant-level operating profit at 13.6% of sales.
- Menu engineering, particularly the success of items like the Smash n’ Stack, and cost control measures contributed to this profitability.

Cost Increases and Commodity Challenges:
- The company experienced a rise in food and beverage costs, with ground beef prices significantly elevated over the prior year.
- These cost increases are primarily due to tightening beef supply and higher purchase prices for commodities, affecting both brands.

Marketing and Advertising Strategy Shift:
- Good Times is shifting its marketing spend from radio promotions to digital media, connected TV, and video streaming, with promising results so far.
- The shift aims to drive traffic more effectively by targeting specific customer segments with precision.