Company: BTBDW
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001477932-25-003689
Chunk: 52

Company: BT Brands, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 52
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 from the same quarter a year ago.

 Page 18 of 24Table of Contents

Costs of Sales - food and paper:

The cost of sales—food and paper—for the fiscal 2025 period decreased as a percentage of restaurant sales to 37.1% from 40.1% in the first quarter of fiscal 2024. This decrease was the net result of improved margins realized through selective menu price increases, a menu change at BTND to introduce hand-cut fries with a lower food cost component, and cost-cutting steps at all locations, moderating inflationary pressures, including a decline in the cost of several key inputs from a year ago.

Restaurant Operating Costs:

Restaurant operating costs (which refer to all the costs associated with the operation of our restaurants but do not include general and administrative expenses and depreciation and amortization) as a percentage of restaurant sales decreased to 90.2% of sales in the fiscal quarter of 2025 from 100.5% in the similar period of fiscal 2024. The decrease resulted from selective price increases, the introduction of hand-cut fries lowering food costs at BTND, and cost-cutting measures at all locations. These actions, combined with moderate inflation, resulted in a decline in key input costs compared to last year, stabilizing commodity costs, as well as the matters discussed in the “Cost of Sales - food and paper,” “Labor Costs,” and “Occupancy and Other Operating Costs” sections below.

Labor Costs

For the first quarter of fiscal 2025, labor and benefits costs decreased as a percentage of restaurant sales to 37.7% from 43.5% in fiscal 2024. The decrease in the percentage cost resulted from improved labor cost controls at all locations and the impact of the closing of the Village Bier Garten, which had higher labor costs than other locations. Payroll costs are semi-variable, meaning they do not change proportionally to changes in revenue.

Occupancy and Other Operating Expenses

For the first fiscal quarter of 2025, occupancy and other expenses decreased to 9.6% of sales from 10.5% in 2024, reflecting the closing of VBG and the impact of cost reductions at all locations and a sales increase on fixed costs.

Depreciation and Amortization Expense:

For the first fiscal quarter of 2025, depreciation and amortization expenses were $156,395 (4.8% of sales), a slight decrease from the prior year of $160,542 (5