Colorado’s tough job market hurts Good Times Restaurants
Good Times, the owner of Good Times Burgers and Bad Daddy’s Burger Bar, was struggling with high labor and food costs. / Photo courtesy of Good Times.
Inflationary pressures continued to hurt Good Times Restaurant in the last quarter.
The Colorado-based company, which operates Bad Daddy’s Burger Bar and Good Times Burgers & Frozen Custard, saw profits decline in its third fiscal quarter despite strong sales. The company attributes the loss of profit 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 while some supply costs have stabilized, the cost of chicken breasts remains high.
“Protein costs, namely beef and bacon, have shown some price stability since last quarter, and we have seen an improvement in the price of chicken wings. But chicken breast, which is our main chicken product from both concepts, continues to remain at stubbornly high levels,” Zink said on an investor call late last week.
Same-store sales at Bad Daddy’s restaurants increased 5.3% in the quarter from a year ago. Same-store sales at Good Times restaurants increased 1.6% for the quarter from a year earlier. Total revenue increased 7.5% to $36.5 million.
Yet high costs wiped out almost all of the chain’s profits. Net income fell from $13.6 million in the same period a year ago to $500,000.
The company said it had focused on keeping price increases to a minimum, arguing that it was among the most expensive premium burger concepts before the pandemic. Its competitors have since caught up, executives said.
“We believe we have experienced fewer price increases in our markets compared to these competitors. Whereas before the pandemic we were typically the most expensive among these chef-led artisan burger concepts, we are now just above the median of this same group,” Zink said. “As mentioned last quarter, this is a strategic move, and we believe this has translated into better sales performance over several years, with seasonally adjusted same-store AUVs near historic highs.”
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