Breaking Down Good Times Restaurants Inc. (GTIM) Financial Health: Key Insights for Investors

You're looking at Good Times Restaurants Inc. (GTIM) and seeing a mixed signal, which is defintely the right read. The headline for the fiscal 2025 third quarter is a solid net income of $1.5 million, or $0.14 diluted earnings per share (EPS), a clear win over prior periods, but that number hides a real operational split between the two core brands. Here's the quick math: while total revenue came in at $37.0 million, the same-store sales (SSS) pressure is significant, with Bad Daddy's Burger Bar seeing a manageable 1.4% decline, but the Good Times Burgers & Frozen Custard concept plunging by 9.0%. The good news is Bad Daddy's maintained a strong 14.4% restaurant-level operating profit margin by controlling costs, but the Good Times margin compressed sharply to just 11.2% due to inflation and lower traffic. The near-term risk is clear: record-high ground beef prices are expected to persist, forcing management to consider incremental menu price increases, but their new Colorado Native Burgers marketing campaign at Good Times is the key opportunity to reverse those deep sales declines. We need to see if the cost discipline can hold up against that commodity inflation.

Revenue Analysis

If you're looking at Good Times Restaurants Inc. (GTIM), the direct takeaway is that its revenue engine is a two-speed system, and the primary driver, Bad Daddy's Burger Bar, is carrying the load. The company's trailing twelve months (TTM) revenue through July 1, 2025, reached approximately $143.40 million, marking a modest year-over-year growth of 1.78%. That's a slow-and-steady pace, but the quarterly volatility tells the real story.

The core revenue comes almost entirely from restaurant sales across two distinct segments, which is important to understand because they face different market pressures. Bad Daddy's is the full-service upscale casual dining segment, while Good Times Burgers & Frozen Custard is the quick-service drive-through (QSR) segment. Bad Daddy's, as the higher-volume concept, generates the maximum revenue for the company.

Here's the quick math on the segment split from the fiscal 2025 first quarter, which gives you a clear picture of where the sales are coming from:

That 72.5% contribution from Bad Daddy's means its performance is defintely the swing factor for GTIM's top line.

Looking at the year-over-year revenue growth rate, we see a choppy 2025. The fiscal Q1 2025 saw total revenues jump 9.6% to $36.3 million compared to the prior year, a positive start. But the second and third quarters brought headwinds, with Q2 revenue decreasing 3.3% to $34.3 million and Q3 revenue dropping 2.4% to $37.0 million. This near-term deceleration is a clear risk you need to monitor.

The most significant change in revenue streams is the same-store sales (SSS) trend, which is a key indicator of restaurant health. The QSR segment, Good Times, has been struggling with a sharp decline, while the casual dining segment, Bad Daddy's, has also turned negative.

• Q3 2025 Bad Daddy's SSS decreased 1.4%.
• Q3 2025 Good Times SSS decreased 9.0%.

This divergence in SSS is critical. Bad Daddy's has managed to improve its restaurant-level operating profit margin slightly to 14.4% in Q3 2025 despite the sales dip, showing good cost control. But the steep decline at Good Times, coupled with margin compression there, suggests an urgent need for strategic action in the QSR segment. You can read more about the operational challenges in Breaking Down Good Times Restaurants Inc. (GTIM) Financial Health: Key Insights for Investors.

Profitability Metrics

You want to know if Good Times Restaurants Inc. (GTIM) is actually making money, and the short answer is that profitability is fragile and highly dependent on the brand. The company swung back to a consolidated net profit in the third quarter of fiscal year 2025, but its margins are still running thin compared to the Quick Service Restaurant (QSR) industry average, which is a key risk.

For Q3 fiscal year 2025, GTIM reported total revenues of $37.025 million and a net income attributable to common shareholders of $1.487 million, giving them a consolidated net profit margin of approximately 4.02%. This is a solid recovery from the Q2 2025 net loss of $0.6 million on $34.3 million in revenue, which translated to a negative net margin of roughly -1.75%.

Margin Performance and Industry Comparison

When you look at the margins, you see a company fighting a tough cost environment. The average net profit margin for the fast-casual and QSR sector typically ranges from 6% to 9%. GTIM's Q3 net margin of 4.02% is below this benchmark, showing how quickly external pressures can erode the bottom line. The company's overall Gross Profit Margin was reported at 11.53% in Q2 2025, which is dramatically lower than the industry's typical gross margins, which can reach 40% or higher. This suggests GTIM's cost of goods sold (COGS) is eating up a huge portion of sales, or their reported gross profit is calculated differently than peers.

Here's the quick math on profitability for the most recent quarter:

• Q3 2025 Net Profit Margin: 4.02% (Calculated from $1.487M Net Income / $37.025M Revenue)
• Industry Average Net Profit Margin: 6% to 9%
• Q2 2025 Gross Profit Margin: 11.53%

Operational Efficiency and Cost Management

The real story on operational efficiency is the divergence between the two main brands. The company uses Restaurant-Level Operating Profit (a non-GAAP measure) to track unit-level performance, and the results show distinct challenges and opportunities:

Bad Daddy's is the clear operational leader, maintaining a 14.4% Restaurant-Level Operating Profit margin through solid cost controls despite lower average unit volumes. Good Times, however, is struggling with margin compression, seeing its restaurant-level operating profit margin fall to 11.2% due to elevated costs and a lack of price increases to offset inflation. The surge in labor costs at Good Times-up to 34.2% of sales-is a defintely a red flag for efficiency.

The management's focus on cost control is visible; they expect General and Administrative (G&A) costs to run between 6% and 7% of sales for the full fiscal year 2025. That's a necessary discipline, but it can't fully overcome the pressure from record-high ground beef costs expected to persist into Q4. To understand the full context of these numbers, you should look at the comprehensive analysis in Breaking Down Good Times Restaurants Inc. (GTIM) Financial Health: Key Insights for Investors.

The near-term action is clear: GTIM needs to either successfully implement menu price increases or see a significant reversal in commodity inflation to push that 4.02% net margin closer to the industry's 6-9% average.

Debt vs. Equity Structure

Good Times Restaurants Inc. (GTIM) maintains a conservative capital structure, relying significantly more on shareholder equity than on long-term debt for its financing. This approach results in a Debt-to-Equity (D/E) ratio that is remarkably low compared to the broader restaurant industry average, signaling a lower financial risk profile.

For the fiscal 2025 second quarter (ended April 1, 2025), the company reported its long-term debt at just $2.6 million. Using the most recent balance sheet data for the third fiscal quarter of 2025, we can estimate the total shareholder equity at approximately $33.81 million. (Here's the quick math: Total Assets of $85.75 million minus Total Liabilities of $51.94 million equals equity.)

This translates to a Debt-to-Equity ratio of roughly 0.08 (calculated as $2.6 million in long-term debt divided by $33.81 million in equity). This is a very low leverage ratio. To be fair, even if we use total liabilities as a proxy for debt, the ratio is about 1.54 ($51.94 million / $33.81 million), which is still far below the industry average of 3.456 for the restaurant sector in 2025 [cite: 1 (from first search)].

• Low D/E ratio suggests financial flexibility.
• Less reliance on external creditors for growth.

The company's financing strategy clearly favors equity and internally generated cash flow over external borrowing, which is a sign of financial strength, especially in a volatile economic environment. This conservative stance is further emphasized by recent capital deployment decisions.

In terms of recent debt activity, management has temporarily paused its share repurchase program, explicitly redirecting cash flow toward cash accumulation and repayment of debt to maintain balance sheet strength and greater liquidity. This is a clear, actionable move to de-risk the balance sheet. They did take on a minor, specific debt obligation in May 2024, involving $380,000 in seller financing (Parker Subordinated Debt) as part of an acquisition of a franchisee's restaurant [cite: 9 (from first search)]. This shows debt is used strategically for small, targeted growth, not for general operations.

The table below summarizes the key leverage metrics for Good Times Restaurants Inc. (GTIM) based on fiscal 2025 data, highlighting its conservative position relative to the industry benchmark:

This is defintely a balance sheet built for weathering a downturn, but it also means the company isn't aggressively using cheap debt to fuel rapid expansion, which could be a missed opportunity if interest rates drop.

For a deeper dive into GTIM's overall financial picture, including valuation and strategic frameworks, you should check out the full post: Breaking Down Good Times Restaurants Inc. (GTIM) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need a clear picture of whether Good Times Restaurants Inc. (GTIM) can cover its near-term obligations, and honestly, the liquidity position is tight. The company's short-term financial health, measured by its ability to convert assets to cash quickly, shows a reliance on future sales to manage current debt.

The core issue is a low quick ratio (or acid-test ratio), which measures current assets easily convertible to cash-like cash and receivables-against current liabilities. For the fiscal year ending September 2025, GTIM's quick ratio stands at a low 0.27. This means GTIM only has 27 cents of liquid assets for every dollar of short-term debt, which is a significant red flag in the restaurant industry. A healthy benchmark is typically 1.0 or higher. The current ratio, which includes inventory, is also likely well below the 1.0 safety mark, even though it saw a 10% increase quarter-over-quarter. Still, the year-over-year (YoY) trend for the current ratio is down by 9%, indicating a weakening overall trend in covering short-term obligations. This is a working capital problem.

Working Capital and Cash Flow Trends

The working capital (Current Assets minus Current Liabilities) is under pressure, as evidenced by the quick ratio decreasing by 21% YoY. While the quick ratio saw a 23% increase from the immediate prior quarter, this volatility suggests management is actively trying to manage the balance sheet, but the overall trend is concerning. The low ratio indicates a negative or near-zero working capital balance, meaning the company would struggle to pay all its bills if they came due immediately. For a company focused on growth and remodels, this lack of buffer is defintely a risk.

The cash flow statement provides a clearer view of how the company is generating and using its cash across its operations, investments, and financing activities:

• Operating Cash Flow (OCF): For the 2025 fiscal year, GTIM generated $1.26 million in operating cash flow. This is the cash generated from the core business (selling burgers and meals) and is the lifeblood of the company.
• Investing Cash Flow (ICF): The company is still investing, with capital expenditures (CapEx) for restaurant remodels and signage projects totaling $200,000 in the third quarter of 2025 alone. This negative cash flow from investing is expected for a company in a growth/remodel phase, but it eats into the OCF.
• Financing Cash Flow (FCF): Management has been strategic here, finishing the third quarter of 2025 with $3.1 million in cash on hand. They have also temporarily paused their share repurchase program to redirect cash flow toward cash accumulation and debt repayment, which is a prudent move to shore up liquidity.

Here's the quick math on the cash flow situation for the fiscal year 2025: the operating cash flow of $1.26 million is barely covering the capital expenditures and other investing/financing needs, resulting in a free cash flow decrease of $-1.21 million for the fiscal year. This is why management is prioritizing cash accumulation.

Liquidity Concerns and Strengths

The primary concern is the low liquidity ratios. A quick ratio of 0.27 is a significant structural weakness. It makes the company vulnerable to unexpected operational disruptions, like a sudden rise in commodity costs or a drop in same-store sales, which GTIM has already faced.

The strength, however, lies in the cash flow management strategy. They ended Q3 2025 with a decent cash balance of $3.1 million and relatively low long-term debt of $2.3 million. The decision to pause share repurchases and focus on cash accumulation is a clear, actionable step to mitigate the liquidity risk. The restaurant model means inventory turns over quickly (high inventory turnover), which makes the current ratio less alarming than in other industries, but a 0.27 quick ratio is still too low for comfort.

For a deeper dive into the company's long-term strategy, you should review the Mission Statement, Vision, & Core Values of Good Times Restaurants Inc. (GTIM).

Valuation Analysis

You're looking at Good Times Restaurants Inc. (GTIM) and trying to determine if the market has it right. The direct takeaway is that the stock appears undervalued on a book value basis, but the recent stock price collapse and a split analyst consensus inject significant risk into that assessment.

The stock currently trades around $1.26 as of late November 2025. This price reflects a brutal 12-month period where the stock has plummeted by over 53.96%, moving from a 52-week high of $2.90 to a low of $1.17. That kind of volatility tells you the market is deeply uncertain about the company's near-term earnings power, especially after the fiscal 2025 second quarter reported a net loss of $0.6 million. It's a classic value trap warning sign.

Here's the quick math on key valuation multiples (ratios):

• Price-to-Earnings (P/E): The P/E ratio stands at approximately 10.67. This is low, suggesting the stock is cheap relative to its trailing twelve-month (TTM) earnings.
• Price-to-Book (P/B): The TTM P/B ratio is a compelling 0.42. A P/B below 1.0 means the market values the company for less than its net asset value (book value), which often signals undervaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA): The estimated Fiscal Year 2025 EV/EBITDA is around 10.05. To be fair, this multiple is in line with or slightly above some quick-service restaurant peers, suggesting that on an operating cash flow basis (earnings before interest, taxes, depreciation, and amortization), the stock is not as deeply discounted as the P/B ratio suggests.

The low P/B ratio of 0.42 is the most compelling argument for undervaluation. But remember, the company is not paying a dividend, with the yield at 0.00%, and has paused share repurchases to focus on cash accumulation and debt repayment, which is a prudent, but not investor-friendly, move.

Honestly, the analyst community is defintely divided, which complicates the picture for decision-makers. One Wall Street analyst maintains a consensus rating of Sell for Good Times Restaurants Inc., reflecting concerns over declining same-store sales and cost pressures. Still, a broader consensus across a handful of analysts shows a high conviction rating, with an 83% Buy consensus. This split highlights the uncertainty: are you buying a deeply discounted asset (the P/B view) or a struggling business (the P/E and Sell rating view)?

The next step is to dig into the Breaking Down Good Times Restaurants Inc. (GTIM) Financial Health: Key Insights for Investors to see if the balance sheet and cash flow can support the low P/B valuation. Finance: Cross-reference the P/B multiple with the company's tangible book value by end of Friday.

Risk Factors

You're looking at Good Times Restaurants Inc. (GTIM) and wondering what could derail its strategy, especially after a mixed fiscal 2025. The direct takeaway is this: the company is battling a severe cost-inflation headwind and a value-driven customer, which is crushing same-store sales (SSS) at the Good Times brand. This isn't just a market blip; it's a structural challenge requiring sharp operational focus.

The biggest near-term risk is the squeeze on margins from rising commodity costs, specifically ground beef. In the second fiscal quarter of 2025, food and beverage costs hit 30.7% of sales, up 30 basis points from the prior year, primarily due to higher beef prices. Management anticipates these ground beef costs will continue to increase throughout the balance of fiscal 2025. Plus, labor costs remain elevated, even with some internal efficiencies, sitting at 34.3% of sales in Q2 2025. That's a significant portion of your revenue disappearing before you even get to overhead.

The operational risks are clear in the Q3 2025 results. Same-store sales are declining across both concepts, but the quick-service Good Times brand is struggling the most, dropping 9.0% in Q3 2025. This reflects a market where customers are aggressively seeking value, and GTIM's competitors are deep-discounting. To be fair, Bad Daddy's SSS decline was a much smaller 1.4% in Q3 2025, which shows their full-service model is holding up better. The company is also exposed to regulatory risk from changes in minimum wage and tip credit regulations, particularly in key markets like Colorado.

Here's a quick look at the core risks and GTIM's counter-actions:

• External Risk: Commodity Inflation: Ground beef costs are soaring.
• Internal Risk: Sales Decline: Good Times SSS fell 9.0% in Q3 2025.
• Financial Risk: Liquidity Management: Need to maintain cash flow amidst losses.
• Strategic Risk: Competition: QSR rivals are resorting to deep discounting.

To mitigate these risks, management has taken concrete actions. Financially, they temporarily paused the share repurchase program in Q2 2025 to redirect cash toward accumulation and debt repayment, bolstering the balance sheet. This is smart. As of Q3 2025, they had $3.1 million in cash and only $2.3 million in long-term debt, which is a manageable position. Operationally, they increased menu pricing by 4.7% in Q2 2025 and are pushing value-oriented items like the expanded smash patty burger lineup. They're also experimenting with a side-included pricing model to simplify value for the customer. That's a defintely necessary move to compete with the QSR giants.

On the sales front, GTIM is trying to fix the traffic problem by hiring a new Senior Director of Marketing and launching a new brand campaign for Good Times, 'Colorado Native Burgers,' using outdoor and streaming video advertising to replace less effective radio spots. They are also continuing their remodel program for Good Times locations to modernize the brand and enhance the customer experience. These are all clear actions, but the market will need to see a reversal in the SSS trend, especially at Good Times, to feel confident. You can dig deeper into the shareholder structure and motivations behind these strategic shifts by Exploring Good Times Restaurants Inc. (GTIM) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking for a clear path forward on Good Times Restaurants Inc. (GTIM), and the picture is a tale of two brands: Bad Daddy's is holding steady through menu innovation, but Good Times needs a serious turnaround. The company's growth hinges on a dual-brand strategy, with a current focus on operational efficiency and a marketing reset to combat a challenging consumer environment, especially after a disappointing Q3 2025.

Year-to-date (YTD) through Q3 2025, the company has generated total revenue of approximately $107.6 million and net income of $1.1 million, showing that profitability is still a tightrope walk. The key growth drivers are not new unit expansion yet, but rather product innovation and a major brand modernization effort.

Key Growth Drivers and Product Innovation

The core of GTIM's near-term growth is menu engineering and brand refresh, not just adding new locations. Bad Daddy's Burger Bar is leading the charge with product innovations like the expansion of its smash patty burger lineup, which has proven popular and margin-favorable. For the Good Times Burgers & Frozen Custard brand, the strategy is about enhancing the value perception of its core offerings-all-natural burgers and frozen custard-by improving kitchen execution and product consistency. They are also condensing the menu to focus on these high-quality, core items.

• Bad Daddy's: Expanding the successful smash patty burger platform.
• Good Times: Rolling out new burger builds to improve value perception.
• Acquisitions: Finalized the acquisition of two Good Times restaurants in the Denver area in Q1 2025.

Strategic Initiatives and Financial Outlook

The most tangible strategic initiative is the system-wide redesign and remodel program for the Good Times brand. Ten locations are slated to undergo remodels in fiscal year 2025, with the goal of completing the entire system by 2026. This is a crucial investment to modernize the quick-service experience and justify their premium pricing model. Also, the company is shifting its marketing spend from traditional radio to more targeted digital media, connected TV, and video streaming, hiring a new Senior Director of Marketing to launch the 'Colorado Native Burgers' campaign, emphasizing their local roots and quality.

Here's the quick math on the recent performance, showing the volatility in this space:

What this estimate hides is the significant pressure on the Good Times brand, which saw a same-store sales decline of 9.0% in Q3 2025. This shows the urgency of the remodel and marketing efforts. The company's last twelve months (LTM) revenue as of July 1, 2025, was $143.40 million, which provides a realistic baseline for the full fiscal year 2025, assuming Q4 performance is comparable to prior periods.

Competitive Advantages and Near-Term Risks

GTIM's primary competitive advantage is its dual-brand strategy. Bad Daddy's offers a full-service, upscale casual dining experience with a chef-driven menu, while Good Times provides a premium, quick-service, drive-thru model. This allows them to capture a broader customer base. They also differentiate themselves by focusing on high-quality ingredients, like 100% all-natural burgers.

Still, near-term risks are clear: rising ground beef costs and increased labor costs from minimum wage hikes in Colorado are expected to impact margins. The company is countering this by avoiding the deep discounting seen by competitors, instead focusing on perceived value through product quality. They ended Q3 2025 with $3.1 million in cash and only $2.3 million in long-term debt, which is a defintely stable balance sheet for weathering these operational headwinds.

For a deeper dive into the company's financial stability, you should read Breaking Down Good Times Restaurants Inc. (GTIM) Financial Health: Key Insights for Investors. Your next step is to monitor the Q4 2025 results, expected around December 11, 2025, to gauge the initial impact of the new marketing and menu strategies.