Good Times Restaurants Fiscal Q3 2026 Earnings: Profit Rises Despite a 5% Revenue Decline

Good Times Restaurants (Nasdaq: GTIM) reported fiscal Q3 2026 net revenue of $35.2 million, down 5.0% from $37.0 million a year earlier, while diluted EPS increased to $0.18 from $0.14. Profitability improved despite weaker sales, supported by better restaurant-level margins, lower corporate costs, and a larger gain on lease terminations and asset disposals. The 13-week quarter ended June 30, 2026, and results were released on August 6, 2026.

Core financial results

Revenue declined as company-owned restaurant sales fell at both brands and the number of operating locations decreased. Nevertheless, operating income rose about 43%, and net income attributable to common shareholders increased about 28%.

Restaurant-level operating profit declined slightly in dollar terms, but its margin expanded from 13.9% to 14.5%. Adjusted EBITDA also increased, providing a non-GAAP indication of improved profitability.

Adjusted EBITDA and restaurant-level operating profit are non-GAAP measures and may not be comparable with similarly named measures reported by other companies.

Business and segment performance

The two restaurant brands diverged during the quarter. Bad Daddy’s remained under traffic pressure, with same-store sales down 2.3%, while Good Times recorded 0.6% same-store sales growth after launching its $2 Bambino promotion systemwide in June.

Good Times also generated higher restaurant-level operating profit and a 1.5-percentage-point margin expansion. Bad Daddy’s maintained its margin but produced lower profit dollars as sales declined.

Lower restaurant counts also weighed on reported sales. Bad Daddy’s ended the quarter with 36 company-owned restaurants versus 39 a year earlier, while Good Times had 25 versus 27. Average weekly sales per restaurant were slightly higher at both brands—$52,500 for Bad Daddy’s and $30,100 for Good Times—but operating weeks declined because of the smaller footprint.

Cost control and asset-disposal gains outweighed weaker sales

Good Times improved profitability even though revenue fell by approximately $1.9 million. Total restaurant operating costs declined to $30.9 million from $32.7 million, while general and administrative costs fell about 8.6% to $2.0 million.

At Good Times restaurants, lower food, payroll, and other operating costs as percentages of sales more than offset higher occupancy costs, driving the brand’s margin expansion. At Bad Daddy’s, food and payroll ratios improved, but higher occupancy and other operating cost ratios kept restaurant-level margin unchanged.

The GAAP operating-income increase also benefited substantially from a $489,000 gain on lease terminations and asset disposals, compared with only $4,000 in the prior-year quarter. Restaurant-level operating profit, which excludes such items, decreased by $81,000 despite its higher margin. Adjusted EBITDA increased by $383,000, while the income tax provision declined to $212,000 from $363,000 despite higher pretax income.

Cash and balance sheet

Cash increased by approximately $1.0 million from the end of fiscal 2025, and shareholders’ equity rose by $2.3 million. Current liabilities were nearly unchanged, while current assets increased.

The company also reported $0.3 million of long-term debt at quarter-end.

Management perspective

CEO Ryan M. Zink said the Good Times brand’s same-store sales had turned positive and that the improvement continued into the fiscal fourth quarter. Management attributed part of the sales lift to the systemwide rollout of the $2 Bambino campaign following an earlier test.

Bad Daddy’s continued to face traffic headwinds, and the company was testing several value-oriented promotions at that brand. Management expects total company profitability in fiscal Q4 to improve year over year because of better cost management and stronger sales performance at Good Times, but it did not provide a quantitative forecast.

Recent insider transactions

The supplied insider data recorded no purchases or sales during the latest six-month period and showed total insider holdings of approximately 2.7 million shares. The latest entries with a disclosed direction and value were two director purchases and one officer sale in May 2025.

A November 7, 2025 entry for CEO Ryan M. Zink did not disclose a transaction direction or value and therefore is not included in the table. These transactions do not by themselves establish insiders’ views of the company’s prospects.

Risks investors should monitor

• Bad Daddy’s traffic remains under pressure. Its 2.3% same-store sales decline and ongoing value-promotion tests indicate that management has not yet reversed the brand’s traffic trend.
• A smaller restaurant footprint is reducing reported sales. Both brands had fewer company-owned restaurants and operating weeks than a year earlier, offsetting slightly higher average weekly sales per location.
• Part of the GAAP profit increase came from asset-related gains. The $489,000 gain on lease terminations and asset disposals provided a meaningful benefit, while restaurant-level operating profit dollars still declined slightly.
• Current liabilities remain above current assets. At quarter-end, current liabilities exceeded current assets by approximately $7.6 million, although long-term debt was only $0.3 million.

Summary

Good Times Restaurants’ fiscal Q3 2026 results combined lower revenue with higher operating income, EPS, and adjusted EBITDA. Good Times produced positive same-store sales and stronger restaurant-level margins, while Bad Daddy’s remained the principal source of sales pressure. Future results will depend on whether Good Times sustains its improvement, Bad Daddy’s value promotions stabilize traffic, and cost control continues to support profits without relying on asset-related gains.