Thursday, May 02, 2024
FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 17 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
1Q24 Results. FAT Brands reported 1Q24 revenue of $152 million, up 43.8% y-o-y, driven by the Smokey Bones acquisition. FAT reported adjusted EBITDA of $18.2 million in the quarter, compared to $19.2 million in 1Q23. Net loss for the quarter was $40.2 million, or $2.37/sh, compared to a net loss of $23.6 million, or $2.05/sh last year. Adjusted net loss for the quarter was $32.9 million, or $2.05/sh, compared to a net loss of $23.5 million, or a loss of $1.53/sh, last year. We had projected revenue of $163 million and a net loss of $23.2 million, or a loss of $1.39/sh.
Economy/Weather Impacted 1Q24 Results. While System-wide sales growth was 4.8% y-o-y, same store sales declined 4% y-o-y, as consumers traded down and weather conditions impacted traffic. Weather conditions also impacted new store openings, which came in at 16 for 1Q24, although management expects to increase to over 40 new openings in 2Q and for 125-150 new openings for all of 2024.
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