Buena Pymes Restaurantes 4T2025: Se generan contradicciones en las ventas en establecimientos de la misma red, mejoras operativas, pronósticos de ganancias y estrategia de marketing

Date of Call: None provided

Financials Results

• Revenue: $34.0M in Q4, down ~5.1% YOY; FY2025 revenue $141.6M, down ~0.5% vs FY2024
• EPS: Net loss $3,000, $0.00 per share in Q4 vs net income $0.2M, $0.02 per share in prior-year Q4
• Gross Margin: Food & beverage costs — Bad Daddy's 31.6% (+40 bps YOY); Good Times 32.1% (+120 bps YOY)
• Operating Margin: Restaurant-level operating profit — Bad Daddy's ~9.9% of sales (down from 13.2% YOY); Good Times 8.0% of sales (down 420 bps YOY); Adjusted EBITDA negative $0.074M vs $1.3M prior-year

Guidance:

• Q1 FY2026: same-store sales improving and adjusted EBITDA expected to improve
• Expect average menu price increase of ~1.7% for Q1 FY2026; only modest, targeted price actions thereafter
• Food and beverage/input costs have decreased and are expected to improve quarter-over-quarter in Q1
• General & administrative expense guidance: ~6%–7% of revenues in fiscal 2026

Business Commentary:

* Challenging Financial Performance: - Total revenues decreased approximately 5.1% for the quarter to $34 million, and decreased approximately 0.5% compared to our all-time record fiscal year 2024 sales to $141.6 million. - The decline was driven by soft sales and higher costs, particularly the significantly elevated cost of ground beef, which put a dent in profitability for the quarter.

• Same-Store Sales Improvement:
• Although same-store sales at Good Times remained negative in the fourth quarter, the 6.6% decline represented a 240 basis point sequential improvement from the fiscal third quarter.

• The improvement was due to strong leadership, better alignment of general manager schedules with peak revenue periods, and enhanced restaurant-level training.

• Price Adjustments and Cost Management:

• The company has only taken approximately 1% of menu price since January 2024, aiming to re-earn a premium to its competitors over time.
• Cost management efforts include targeted menu price adjustments, addressing value concerns with promotions, and a heightened focus on improving operating execution.

• Labor and Minimum Wage Impact:
• Labor costs increased by 140 basis points compared to the prior year quarter to 35.7% for the quarter due to lower team member productivity.
• The increase was also attributed to impending minimum wage increases in Colorado, expected to impact productivity further in the current year.
  

  Sentiment Analysis:

  Overall Tone: Neutral

  • Management stated the quarter was "challenging" and expressed disappointment due to soft sales and elevated beef costs, but noted sequential same-store sales improvement and said "the first quarter of fiscal 2026 is shaping to mark improvement in same-store sales and in adjusted EBITDA."

Contradiction Point 1

Same-Store Sales Improvement Expectations

It involves differing expectations for same-store sales improvements, which could impact investor perceptions of the company's operational strategy and financial performance.

Were there any specific questions raised during the call? - No specific questions were raised during the call.

20251224-2025 Q4: Despite the challenging fourth quarter, the first quarter of fiscal 2026 is shaping up to show improvements in same-store sales and adjusted EBITDA. - Ryan Zink(CEO)

No questions were raised during the Q&A session. - Abby (Operator)

2025Q4: The fourth fiscal quarter was challenging, particularly at Good Times due to soft sales and higher costs, including significantly elevated ground beef costs. - Ryan Zink(CEO)

Contradiction Point 2

Focus on Operational Improvements

It involves a shift in the emphasis on operational improvements, which can affect the perception of the company's approach to addressing its operational challenges.

What are the plans to improve same-store sales and profitability? - Ryan Zink

20251224-2025 Q4: We are committed to immediate improvement. Craig, our Director of Operations, is focusing on realigning general manager schedules and improving training. - Ryan Zink(CEO)

No questions were raised during the Q&A session. - Abby (Operator)

2025Q4: The fourth fiscal quarter was challenging, particularly at Good Times due to soft sales and higher costs, including significantly elevated ground beef costs. - Ryan Zink(CEO)

Contradiction Point 3

Earnings Outlook and Investment Strategy

It involves changes in the company's financial outlook and investment strategy, which are critical for investors and stakeholders to understand the business's short-term and long-term trajectory.

What are the plans to improve same-store sales and profitability? - Ryan Zink

20251224-2025 Q4: We are committed to immediate improvement. Craig, our Director of Operations, is focusing on realigning general manager schedules and improving training. We are introducing True Cook to Order for burger products and targeting value promotions. We are also addressing menu engineering and simplifying mobile ordering. - Ryan Zink(CEO)

Is EBITDA reaching $2 million to $2.2 million quarterly, maintenance CapEx at $0.5 million, and investment CapEx a separate discussion? - William James (Indiscernible)

2025Q3: We are in our higher indexing quarters, with this quarter's EBITDA at $2.2 million being among the highest. We budget roughly 1% of sales for maintenance CapEx. Our priority is to accumulate cash for options like debt paydown, share repurchases, or new store development. We have plans for remodel and technology projects at both concepts for fiscal 2026. - Ryan Zink(CEO)

Contradiction Point 4

Marketing and Value Proposition Strategy

It highlights differences in the company's approach to marketing and value creation, which can impact sales, customer loyalty, and brand perception.

What are the plans to improve same-store sales and profitability? - Ryan Zink

20251224-2025 Q4: We are committed to immediate improvement. Craig, our Director of Operations, is focusing on realigning general manager schedules and improving training. We are introducing True Cook to Order for burger products and targeting value promotions. We are also addressing menu engineering and simplifying mobile ordering. - Ryan Zink(CEO)

Can you explain the underperformance of the Good Times concept in the third quarter and identify any specific issues? - Sanjay Raaga (Unknown)

2025Q3: Factors affecting performance include macro factors, competing brands' marketing and discounting strategies, and our focus on maintaining margins without heavy discounting. We believe there are opportunities to provide value without deep discounts, emphasizing brand communication and advertising. - Ryan Zink(CEO)

Contradiction Point 5

Challenging Operating Environment

It reflects differing expectations and assessments of the company's operating environment and its impact on performance.

How did the fourth fiscal quarter perform for the Good Times and Bad Daddy brands? - Keri August

20251224-2025 Q4: The fourth fiscal quarter was challenging, particularly at Good Times due to soft sales and higher costs, including significantly elevated ground beef costs. - Ryan Zink(CEO)

Any questions today? - Operator

2025Q2: This was a tough quarter, and I expect the operating environment in the third fiscal quarter will be equally challenging. - Ryan Zink(CEO)