Q3 2025 FAT Brands Inc Earnings Call Transcript
Key Points
- FAT Brands Inc (FAT) resolved significant legal matters, including the dismissal of DOJ charges and settlement of Delaware derivative cases, which will save the company approximately $30 million annually.
- The company is focusing on strategic execution and enhancing shareholder value, with plans for a $75 million to $100 million equity raise at Twin Peaks to pay down debt and fund new unit development.
- FAT Brands Inc (FAT) delivered adjusted EBITDA of $13.1 million for the quarter, with improved same-store sales performance, narrowing the decline to 3.5% from 4.2% in the previous quarter.
- The company opened 13 new locations during the third quarter and 60 locations year-to-date, with a target of 80 new openings for the year, focusing on high-performing brands.
- FAT Brands Inc (FAT) has secured over 190 franchise development agreements year-to-date, contributing to approximately 900 committed locations scheduled to open over the next 5 to 7 years, with potential earnings impact of $50 million to $60 million in incremental earnings.
- Total revenues decreased by 2.3% to $140 million from $143.4 million in the previous year's quarter, primarily due to the closure of underperforming Smokey Bones locations and lower same-store sales.
- General and administrative expenses increased by $8.2 million to $42.7 million, driven by store closure reserves and non-cash impairment of fixed assets.
- Net loss attributable to FAT Brands Inc (FAT) was $58.2 million, or $3.39 per diluted share, compared to a net loss of $44.8 million, or $2.74 per diluted share, in the prior year quarter.
- The company is experiencing a slowdown in the pace of new store openings, with the target reduced from 100 to 80 new stores for 2025, due to delays by franchisees.
- FAT Brands Inc (FAT) is operating in a challenging restaurant industry environment, described as recessionary, with some brands experiencing a decline in same-store sales.
Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Fat Brands Inc third quarter 2025 earnings conference call.
At this time, all participants have been placed in a listen-only mode. Please note that this conference is being recorded today, November 5, 2025.
On the call from Fat Brands, our Chairman and Chief Executive Officer Andy Wiederhorn and Chief Financial Officer Ken Kuick.
This afternoon, the company released its third quarter, 2025 financial results. Please refer to the earnings release and earnings supplement, both of which are available in the investors section of the company's website at www.fatbrands.com.
Each contains additional details about the third quarter, which closed on September 28, 2025.
Before we begin, I must remind everyone that part of the discussion today will include forward-looking statements. These forward-looking statements are not guarantees of future performance, and therefore undue reliance should not be placed upon them.
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