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FAT Brands (FAT) Reports Solid Unit Developments in 2023
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FAT Brands Inc. (FAT - Free Report) reported substantial unit growth in 2023, marked by new store openings and development agreements.
As of Dec 31, 2023, the company launched 125 new stores and expanded its development pipeline (by over 200 stores) to 1,200 units.
During the year, the company reported brand expansions, including Fazoli’s in Phoenix and Orlando, Round Table Pizza in Houston, Johnny Rockets in Iraq, Twin Peaks in Jacksonville, FL, Columbus, OH, and Chattanooga, TN, and Fatburger’s in Tampa and Chicago. Moreover, the company showcased new stores in airports, hospitals and theme parks.
Apart from store openings, FAT successfully leveraged cross-brand synergies. During the year, the company initiated offering cookies (in almost all of their brands), making the most of their Georgia-based facility. They also enhanced their casual dining category by adding Smokey Bones to the well-known brands. The addition provides the sales team with more choices for development, supporting franchise partners and boosting new unit growth.
Taylor Wiederhorn, Chief Development Officer at FAT Brands, highlighted the expansion of their organic development pipeline through franchisee-purchased restaurants. The deals include Fazoli’s, Marble Slab Creamery and Great American Cookies to Puerto Rico and Hot Dog on a Stick, Great American Cookies and Marble Slab Creamery to Iraq.
The management emphasizes on opening additional restaurants in Texas, Canada, Mexico, and the Middle East. This includes brands like Fatburger, Johnny Rockets, Round Table Pizza and Pretzelmaker and co-branded concepts like Fatburger and Buffalo’s Express, Fatburger and Round Table Pizza, and Great American Cookies and Marble Slab Creamery. In 2024, the company plans to open 150 units.
Price Performance
Image Source: Zacks Investment Research
Shares of FAT have increased 20.2% in the past three months compared with the industry’s 11.4% rise. The company has been benefitting from strong demand in the snack and dessert category, acquisition initiatives and development efforts. Also, focus on franchise partners bode well. Going forward, the company is committed to improving productivity at its Georgia-based manufacturing facility to stimulate growth. There is a continued commitment to evaluating potential acquisition targets that demonstrate long-term sustainability, robust profitability and compatibility with the existing platform in terms of scalability and synergy. Earnings estimates for 2024 have remained unchanged in the past 30 days.
Zacks Rank & Key Picks
FAT Brands currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are:
Arcos Dorados Holdings Inc. (ARCO - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 28.3% on average. Shares of ARCO have rallied 38.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ARCO’s 2024 sales and earnings per share (EPS) indicates 10.6% and 15.5% growth, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. (CHUY - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 24.8%, on average. The stock has declined 3.3% in the past year.
The Zacks Consensus Estimate for CHUY’s 2024 sales and EPS suggests rises of 4.2% and 1%, respectively, from the year-ago period’s levels.
Darden Restaurants, Inc. (DRI - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 4.2%, on average. Shares of DRI have increased 9.4% in the past year.
The Zacks Consensus Estimate for DRI’s 2024 sales and EPS indicates 9.9% and 10.9% growth, respectively, from the year-ago period’s levels.
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FAT Brands (FAT) Reports Solid Unit Developments in 2023
FAT Brands Inc. (FAT - Free Report) reported substantial unit growth in 2023, marked by new store openings and development agreements.
As of Dec 31, 2023, the company launched 125 new stores and expanded its development pipeline (by over 200 stores) to 1,200 units.
During the year, the company reported brand expansions, including Fazoli’s in Phoenix and Orlando, Round Table Pizza in Houston, Johnny Rockets in Iraq, Twin Peaks in Jacksonville, FL, Columbus, OH, and Chattanooga, TN, and Fatburger’s in Tampa and Chicago. Moreover, the company showcased new stores in airports, hospitals and theme parks.
Apart from store openings, FAT successfully leveraged cross-brand synergies. During the year, the company initiated offering cookies (in almost all of their brands), making the most of their Georgia-based facility. They also enhanced their casual dining category by adding Smokey Bones to the well-known brands. The addition provides the sales team with more choices for development, supporting franchise partners and boosting new unit growth.
Taylor Wiederhorn, Chief Development Officer at FAT Brands, highlighted the expansion of their organic development pipeline through franchisee-purchased restaurants. The deals include Fazoli’s, Marble Slab Creamery and Great American Cookies to Puerto Rico and Hot Dog on a Stick, Great American Cookies and Marble Slab Creamery to Iraq.
The management emphasizes on opening additional restaurants in Texas, Canada, Mexico, and the Middle East. This includes brands like Fatburger, Johnny Rockets, Round Table Pizza and Pretzelmaker and co-branded concepts like Fatburger and Buffalo’s Express, Fatburger and Round Table Pizza, and Great American Cookies and Marble Slab Creamery. In 2024, the company plans to open 150 units.
Price Performance
Image Source: Zacks Investment Research
Shares of FAT have increased 20.2% in the past three months compared with the industry’s 11.4% rise. The company has been benefitting from strong demand in the snack and dessert category, acquisition initiatives and development efforts. Also, focus on franchise partners bode well. Going forward, the company is committed to improving productivity at its Georgia-based manufacturing facility to stimulate growth. There is a continued commitment to evaluating potential acquisition targets that demonstrate long-term sustainability, robust profitability and compatibility with the existing platform in terms of scalability and synergy. Earnings estimates for 2024 have remained unchanged in the past 30 days.
Zacks Rank & Key Picks
FAT Brands currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are:
Arcos Dorados Holdings Inc. (ARCO - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 28.3% on average. Shares of ARCO have rallied 38.3% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ARCO’s 2024 sales and earnings per share (EPS) indicates 10.6% and 15.5% growth, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. (CHUY - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 24.8%, on average. The stock has declined 3.3% in the past year.
The Zacks Consensus Estimate for CHUY’s 2024 sales and EPS suggests rises of 4.2% and 1%, respectively, from the year-ago period’s levels.
Darden Restaurants, Inc. (DRI - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 4.2%, on average. Shares of DRI have increased 9.4% in the past year.
The Zacks Consensus Estimate for DRI’s 2024 sales and EPS indicates 9.9% and 10.9% growth, respectively, from the year-ago period’s levels.