Good Times Restaurants Inc.
Q2 2021 Earnings Call Transcript

Published: 9 May 2021

[Operator:]

Good afternoon, ladies and gentlemen. Welcome to the Good Times Restaurants Inc. Fiscal 2021 Second Quarter Earnings Call. By now, everyone should have access to the company's earnings release and 10-Q filing, which are 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. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore, investors should not place undue reliance on them. And the company undertakes no obligation to update these statements to reflect the events or circumstances that might arise after this call. The company refers you to their recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial conditions, including risks related to the COVID-19 pandemic.

[Ryan Zink:]

Thank you, Grant. Thank you all for joining us on the call today. We're excited about both of our brands' performance during this quarter. As restrictions on dining rooms have eased here in Colorado, we've not seen significant negative impact on the Good Times business, which continues to post strong same store sales and near record high average weekly sales, which were eclipsed only during last year's third quarter, a time that seasonality historically has indexed at its highest and specifically last year, a time when dining room restrictions in Colorado were at their peak and general fear of indoor dining was its most intense. At Bad Daddy's, our March sales approached 2019 average weekly sales at approximately 7% below 2019 levels. And on a same store basis, sales were flat to 2019 in April and began to exceed 2019 sales levels this May. We continue to believe that our focus on speed, accuracy and consistent execution at our Good Times Drive-Thrus have driven improved customer experiences versus what we had delivered in prior years. The pivot we made in early fiscal 2020, including slight menu modifications and minor equipment investments to improve our ability to effectively hold fries and other items for short periods of time rather than cooking every customer's check to order, set us up well not just for the initial sales shortfall Good Times experienced in April 2020. But for the subsequent sales lift that we saw beginning in May 2020 and that has continued to this day. We believe the improved customer experience has created repeat customers and long-term loyalty that we expect to stay with us as we return to more normal operating conditions in Colorado. At Bad Daddy's, our steadfast commitment to scratch cooking in our kitchens, including our housemade sauces, hand cut fries and chips and bold flavorful burger builds, differentiate us from a sea of sameness that exists among casual dining barn grill and burger concepts. We reduced the size of our menu during the pandemic, and it continues to remain smaller than it was at the pandemic's onset. However, we never eliminated menu items that we believed were truly unique, and we've since added a few additional items to the menu based on feedback both from our customers and our operators. Innovation in taste and flavors will continue to be a part of the ongoing evolution of our menu. However, executing our core menu exceptionally well is our primary objective.

[Operator:]

There appear to be no questions at this time.

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[Ryan Zink:]

Thank you, Grant.

[Operator:]

Sure. I would like to turn this conference back over to Ryan for closing remarks.

[Ryan Zink:]

Thanks, again. Midway through our fiscal year, we continue to delever our balance sheet and build a foundation for future growth financially. However, beyond that, we continue to develop a culture of both of our concepts that will enable us to effectively compete in the labor market for high quality, talented employees to share our values. Our restaurant leaders have fought fearlessly through a pandemic and now as the country's economy rebounds, are winning the fight against one of the most competitive labor markets we have seen. I couldn't be more proud of the restaurant general managers and their teams at both of our brands as we continue to serve great food, create great experiences for our guests through genuine hospitality and take pride in building an organization that creates value for our customers, for our employees and for our shareholders. With that, we will conclude today's call. Thank you all for joining us today.

[Operator:]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.