On October 26, 2023, FAT Brands Inc (FAT, Financial) released its financial results for the fiscal third quarter ended September 24, 2023. The company reported a 6.0% increase in total revenue to $109.4 million, compared to $103.2 million in the same period last year. However, the company experienced a net loss of $24.7 million, or $1.59 per diluted share, compared to $23.4 million, or $1.52 per diluted share, in Q3 2022. Adjusted EBITDA was $21.9 million, down from $24.6 million in the same period last year.
Company Performance and Future Outlook
Andy Wiederhorn, Chairman of FAT Brands, commented on the company's performance, stating,
With the acquisition of Smokey Bones early in the fourth quarter, we have grown the FAT Brands portfolio to 18 iconic restaurant brands with annualized system wide sales of $2.4 billion. Year to date through the third quarter, we have opened 96 restaurants, including 30 that opened in the third quarter, and are on track to open 150 new restaurants in 2023. We are seeing strong franchisee interest in development opportunities, having signed over 200 development agreements in 2023, bringing our total pipeline to over 1,100 units. This represents the potential for over 50% EBITDA growth over the next several years."
Financial Highlights
Key financial highlights for the fiscal third quarter of 2023 include a 0.8% system-wide sales growth compared to the prior year fiscal quarter and year-to-date system-wide same-store sales growth of 1.3% compared to the prior year. The company also reported 30 new store openings during the fiscal third quarter of 2023.
Financial Results Summary
Total revenue increased by $6.2 million, or 6.0%, in Q3 2023 to $109.4 million compared to $103.2 million in the same period of 2022. This increase was driven by a 4.8% increase in royalties, a 2.0% increase in company-owned restaurant revenues, a 228.5% increase in franchise fees, and an 18.9% increase in revenues from the manufacturing facility. Costs and expenses remained largely unchanged in the third quarter, increasing 0.5% in Q3 2023 compared to the same period in the prior year.
Looking Ahead
Ken Kuick, Co-Chief Executive Officer of FAT Brands, commented on the company's future prospects, stating,
We believe there are significant opportunities on the horizon for FAT Brands. Our seasoned leadership team and strong brand management platform allow us to efficiently integrate new brands while maintaining a healthy and evolving pipeline for organic growth. These strengths position us for continued growth in the future, which will help deleverage our balance sheet."
Explore the complete 8-K earnings release (here) from FAT Brands Inc for further details.
