GTIM

• Sales Performance

  • Good Times shifted to positive year-over-year same-store sales in Q3 2026, and this positive trend extended into Q4 FY26.
  • A system-wide expansion of the $2 promotional Bambino cheeseburger slider test (originally a summer-only promotion) delivered mid-single-digit same-store sales growth in June, with concurrent growth in sales, average check size, and transaction volume in June and July.
  • The promotion has become the top-selling single burger item, with limited cannibalization of larger burger offerings, as most customers supplement Bambino purchases with additional menu items. Management is considering extending the promotion beyond its original end date.
  • Bad Daddy's same-store sales underperformed in the quarter; the Smashadilla Burger limited-time offering (LTO) launched in May was the best-selling individual LTO burger in Bad Daddy's history. The current August LTO is the Big Dill, with monthly LTO drops planned through the end of the calendar year, including new items and returning fan favorites.

• Product Innovation

  • Bad Daddy's will add its first-ever core menu sampler platter in Q1 FY27, plus a new Power Bowl core menu item that reintroduces ahi tuna (last on the core menu in 2019).
  • Good Times has a full product calendar planned for next quarter, centered on consistent operational execution and improved guest hospitality across all service channels (drive-through, outdoor walk-up, indoor dining).

• Operational and Financial Updates

  • The company rolled out a new learning management system to expand team member training and retraining, with the goal of improving salesmanship to drive long-term sales and traffic growth.
  • The full balance of the company's revolving credit facility was paid down during the quarter, ending with a strong cash position and only $300,000 in seller finance debt tied to a 2024 acquisition.

• No additional menu price increases are planned for Good Times for the remainder of fiscal 2026, given current market competitiveness.
• Full-year fiscal 2026 general and administrative expenses are expected to be between 6% and 7% of total revenue.

1. Bad Daddy's: Total restaurant sales decreased $1.6 million year-over-year to $24.9 million, contributing 70.7% of the company's total Q3 2026 revenue. Same-store sales decreased 2.3% year-over-year, and were down 1.5% year-to-date. Food and packaging costs hit 30.3% (a 30 basis point decrease YoY), labor costs were 33.6% (a 70 basis point decrease YoY), occupancy costs were 6.3% (a 20 basis point increase YoY), and other operating costs were 15.3% (a 70 basis point increase YoY). Restaurant-level operating profit (non-GAAP) decreased $0.2 million YoY to $3.6 million, holding steady at 14.4% of sales. The comp base included 36 restaurants at quarter end.

2. Good Times (company-owned): Total restaurant sales decreased ~$0.2 million YoY to $10.1 million, contributing 28.7% of the company's total Q3 2026 revenue. Same-store sales increased 0.6% year-over-year. Average menu prices were 1.7% higher than Q3 2025. Food and packaging costs hit 31.2% (a 30 basis point decrease YoY), labor costs were 33% (a 120 basis point decrease YoY), occupancy costs were 9.1% (a 50 basis point increase YoY), and other operating costs were 13.7% (a 50 basis point decrease YoY). Restaurant-level operating profit increased $0.1 million YoY to $1.3 million, rising 150 basis points to 13% of sales. The comp base included 25 restaurants at quarter end.

3. Corporate: Combined general and administrative expenses were $2 million (5.6% of total revenue), a 30 basis point decrease YoY. Total company net income to common shareholders was $1.9 million ($0.18 per diluted share), up from $1.5 million ($0.14 per diluted share) in Q3 2025. Adjusted EBITDA was $2.5 million, up from $2.1 million in Q3 2025. The quarter ended with $3.6 million in cash and $0.3 million in long-term debt.

• Disruptions to business operations from pandemics and other public health emergencies
• Persistent staffing constraints at restaurant locations
• Supply chain disruptions and ongoing inflationary pressure on input and operating costs
• Delays in new restaurant development and opening due to weather, local permitting, or other obstacles
• Increased competition in the casual dining/burger segment
• Cost increases and ingredient shortages for core menu items
• Broad economic and operating conditions that may reduce customer traffic or average spend
• Risks associated with executing the company's share repurchase program, acquiring additional restaurants, and integrating new locations
• Inadequate operating cash flows, and changes to the cost or availability of capital and credit facilities for liquidity needs
• Changes to federal, state, or local laws and regulations affecting restaurant operations, including wage and tip credit regulations
• All additional risks outlined in the company's Form 10-K for the fiscal year ended September 30, 2025 and other SEC filings

Q: Analyst Steven Stern asked management to comment on whether the company would consider initiating a cash dividend, given the strong quarter, clean balance sheet with low debt and high cash, existing share repurchase program, and the company's low P/E and low price-to-book valuations. / A: CEO Ryan Zink responded that the company's board continuously evaluates all alternative methods to deliver shareholder value, and a cash dividend is included in the set of alternatives currently under board consideration.

Q: Stern noted that initiating a dividend would expand Good Times' potential investor base by adding it to the watchlists of individual and institutional investors that specifically require income-producing equity holdings, and asked management to consider this dynamic. / A: Zink confirmed he would share this input with the full board of directors for their evaluation.