Inflationary pressures continued to hurt Good Times Restaurant last quarter.
The Colorado-based company, which operates Bad Daddy’s Burger Bar and Good Times Burgers & Frozen Custard, saw profits saw a profit decrease in its third fiscal quarter despite high sales. The company is attributing the profit loss to inflation.
“This quarter continues to reflect the significant inflationary pressures facing the restaurant industry across the country,” CEO Ryan Zink said in a statement. “In Colorado, the labor market has been particularly competitive.”
The company said that while some supply costs have stabilized, the cost of chicken breasts remains high.
“Protein costs, namely beef and bacon have shown some price stability from last quarter, and we've seen improvement in the pricing of chicken wings. But chicken breast, which is our main chicken product of both concepts continues to remain at stubbornly high levels,” Zink said in a call to investors late last week.
Same-store sales for Bad Daddy’s restaurants increased 5.3% in the quarter compared to the previous year. Same-store sales for Good Times restaurants increased 1.6% for the quarter compared to the year prior. Total Revenues increased 7.5% to $36.5 million.
Yet high costs wiped out nearly all the chain’s profits. Net income declined to $500,000 from $13.6 million in the same period a year ago.
The company said it has placed a focus on keeping price increases to a minimum, arguing that it had been among the highest-priced high-end burger concepts before the pandemic. Its competitors have since caught up, executives said.
“We believe we have taken less price increase in our markets compared to those competitors. Whereas pre-pandemic, we were generally the highest priced among these chef-driven craft burger concepts, we're now just above the median among that same group,” Zink said. “As mentioned last quarter, this has been a strategic decision, and we believe that this has paid off in stronger multiyear sales performance with seasonally adjusted same-store AUVs near all-time highs.”
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