Good Times Restaurants Inc. said on Wednesday that its same-store sales increased 3.7 percent at its flagship Good Times Burgers & Frozen Custard chain in the quarter ended June 27.
The performance at the quick-service chain was better than company executives had expected, and included a 5.3-percent same-store sales performance in June.
“We are very pleased with our results during the quarter, particularly given the competitive discounting environment,” CEO Boyd Hoback said in a statement.
Same-store sales increased 0.1 percent at Good Times’ full-service concept, Bad Daddy’s Burger Bar. The company blamed the performance on weak results at one location beset by construction.
Good Times Restaurants is based in Denver. The company’s flagship chain operates 38 locations, mostly in Colorado. Bad Daddy’s, meanwhile, operates 23 locations.
The company has been working to reverse financial losses. The company had previously reported a loss of $564,000 in the company’s fiscal second quarter ended March 28.
In a note last month initiating coverage of the company with a Buy rating, Maxim Group Analyst Stephen Anderson suggested the company is generating better earnings before interest, taxes, depreciation and amortization. He also expects margins to improve despite higher minimum wages in Colorado.
He also suggested that Bad Daddy’s is “a next generation casual-dining concept” that will serve as the primary growth driver for Good Times in the coming years. The company is expanding in Colorado and North Carolina and is planning to have at least 60 locations in the next few years.
Good Times acquired Bad Daddy’s for $21 million in 2015.
Bad Daddy’s opened three locations in the company’s fiscal third quarter, two in Denver and one in Raleigh, and expects to have opened a total of eight Bad Daddy’s locations this fiscal year, plus one new Good Times unit.
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