Good Times(US:GTIM)2019-05-11 18:37Financial Data and Key Metrics Changes - Total revenue grew by 15% in Q2 2019, with Bad Daddy's comp restaurant sales increasing by 1.3% despite losing 12 operating days due to adverse weather events [8][10] - Good Times experienced a 7.1% decrease in comp restaurant sales, adjusted to a 5.9% decline when accounting for lost operating days [8][10] - The net loss for the quarter was $450,000, slightly widening from a net loss of $431,000 in the previous year [40] Business Line Data and Key Metrics Changes - Bad Daddy's restaurant sales increased by 27.8% to $20.4 million, attributed to 105 more store weeks compared to the previous year [26] - Good Times restaurant sales decreased by approximately $800,000 to $6.6 million, driven by a decline in same-store sales and one fewer opened restaurant [34] - Restaurant level operating profit for Good Times decreased to $509,000, with a margin decline to 7.7% due to higher labor costs and lower sales [38] Market Data and Key Metrics Changes - Off-premise sales at Bad Daddy's averaged over 10% of total sales, with some stores exceeding 20% [13] - Average weekly sales for Bad Daddy's during the quarter were $47,600, compared to $49,300 in the previous year [15] - Labor costs at Good Times were reported at 39.0%, influenced by an average wage increase of approximately 11.6% [37] Company Strategy and Development Direction - The company plans to open three additional Bad Daddy's locations in summer 2019 and one more in early fiscal 2020, focusing on growth in existing and new markets [18] - The strategy includes refining site selection for new locations to target destination-oriented sites with strong daytime employment [19] - The company is implementing technology to improve operational efficiency and address labor pressures [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to positive same-store sales for Good Times, anticipating a recovery in sales trends [47] - The company expects to maintain positive comp sales for both brands for the remainder of the year [10] - Management highlighted the importance of menu innovation and cost management to improve margins and sales performance [21][22] Other Important Information - The company reiterated its revenue guidance for fiscal 2019, projecting revenues between $112 million and $114 million [41] - Adjusted EBITDA for Q2 2019 decreased slightly to $1.147 million [41] - The company finished the quarter with $3.4 million in cash and $12 million drawn against its debt facility [44] Q&A Session Summary Question: Sales trends for Bad Daddy's in the current quarter - Management indicated that sales trends for Bad Daddy's have flattened out but expect to maintain the same trend as in Q2 [51] Question: Development acceleration and CapEx for 2020 - Management anticipates development in 2020 will be more than in fiscal 2019, likely between the previous year's nine openings and this year's five [53] Question: Pricing strategies for Bad Daddy's - Bad Daddy's had approximately 1.7% price increase in Q2, with an additional 0.8% expected in the coming quarter [56][57]