FAT Brands — parent company of Twin Peaks and Fazoli’s — reported another net loss for the second quarter ended June 30, as well as 1.6% same-store sales declines. It’s a familiar story for the company, which has been balancing its growing debt with accelerated development for several quarters, amid ongoing legal controversy for founder Andy Wiederhorn.
The company currently has a development pipeline of 1,100 stores and is still looking to add more concepts to its portfolio, even though FAT Brands has acquired seven companies over the past four years, starting with Johnny Rockets in September 2020, and ending with Smokey Bones Barbecue in September 2023, which were both acquired from the same private equity firm, Sun Capital Partners. Twin Peaks, which has been considered the most lucrative of FAT Brands’ purchases, confidentially filed for an IPO with Smokey Bones as a combined entity in May.
Although FAT Brands is still on the lookout for new concepts to purchase (which might include a salad, sandwich, or coffee chain next), the company is aware that some of its many investments might not be as profitable as first expected. During both the second quarter earnings report, and the previous first quarter earnings report, FAT Brands leadership mentioned future divestment of current brands as an option, in order to “manage outstanding debt, and ultimately increase long-term value for our stakeholders,” FAT Brands co-CEO Rob Rosen said in a statement.
“Over the last three years, we have grown the FAT Brands portfolio to 18 iconic restaurant brands with approximately 2,300 units across 40 countries and 49 U.S. states,” Wiederhorn, chairman of FAT Brands, said in a statement. “We are seeing strong new franchisee activity as well as continued demand from existing franchise partners to develop other brands within our portfolio and heightened interest from our franchise partners,who are eager to explore additional co-branding opportunities that leverage synergies within our brand offerings.”
For the second quarter ended June 30, FAT Brands opened 24 new restaurants, with 120 more openings planned for the back half of 2024. The company reported total revenue growth up 42.4% to $152 million, compared with $106.8 million in the second quarter of 2023. The net loss was $30.9 million, or $1.93 per share, compared to $3 million, or eight cents per diluted share, in the second quarter of 2023.
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