- Revenue Decline: Fiscal 2025 annual revenue fell 0.5% to $141.6M, with Q4 down 5.1% to $34M.
- Bad Daddy's Sales Drop: Q4 sales dropped $1.7M to $24M (4.6% same-store sales decline), driven by closed locations and traffic loss.
- Cost Pressures: Food costs rose to 31.6% (Bad Daddy's) and 32.1% (Good Times), while labor costs hit 35.7% and 35.9%, up 140–200 basis points.
- Net Loss Recorded: Net loss of $3,000 ($0/share) in 2025 vs. $200K net income ($0.02/share) in 2024, with adjusted EBITDA at -$74K vs. $1.3M.
- Liquidity and 2026 Outlook: Closed Q4 with $2.6M cash and $2.3M debt, targeting 6–7% G&A costs and EBITDA improvement in 2026.
Operational Performance
At Bad Daddy's, total restaurant sales decreased by $1.7 million to $24 million for the quarter, driven by reduced customer traffic and a closed restaurant, partially offset by menu price increases. Same-store sales decreased by 4.6% for the quarter. Food and beverage costs increased by 40 basis points to 31.6% due to record-high ground beef prices. Labor costs rose by 140 basis points to 35.7%. Restaurant-level operating profit was $2.4 million or 9.9% of sales, down from $3.4 million or 13.2% last year.
Segment-wise Performance
At Good Times, total restaurant sales decreased by $300,000 to $9.7 million for the quarter, with same-store sales decreasing by 6.6%. Food and packaging costs increased by 120 basis points to 32.1% due to high beef prices. Labor costs rose by 200 basis points to 35.9%. Restaurant-level operating profit decreased to $800,000 or 8% of sales.
Outlook and Valuation
The company expects general and administrative costs of 6% to 7% and an improvement in same-store sales and adjusted EBITDA for 2026. Analysts estimate revenue growth of 27.2% for next year. With a P/S Ratio of 0.09 and an EV/EBITDA of 11.21, the stock's valuation appears to be factoring in some level of operational recovery. The company's ROE of 3.15% and ROIC of 0.07% indicate room for improvement in profitability.
Financial Health
The company finished the quarter with $2.6 million in cash and $2.3 million of long-term debt. The Net Debt / EBITDA ratio stands at 8.35, indicating a challenging debt position relative to its EBITDA. The Free Cash Flow Yield is -13.98%, suggesting potential cash flow constraints.