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FAT Brands Inc. (FAT - Free Report) reported fourth-quarter fiscal 2023 results, with earnings missing the Zacks Consensus Estimate, while revenues beat the same. The top and the bottom lines increased on a year-over-year basis.
The company’s quarterly results reflect an uptrend in the top line, attributable to an increase in system-wide sales and new restaurant openings. Solid franchisee interest in development opportunities has increased the company’s total pipeline to 1,100 units, including more than 225 development agreements signed in 2023. Also, the acquisition of Smokey Bones early in the fourth quarter has grown the FAT Brands portfolio to 18 iconic restaurant brands with annualized system-wide sales of $2.5 billion.
However, declining comps and increasing costs and expenses partially offset the positive impacts of the above-mentioned tailwinds.
Nonetheless, the company is optimistic about moving into 2024 thanks to its strong brand management platform. It believes that this platform positions it well to efficiently integrate new brands while maintaining a healthy and evolving pipeline for organic growth.
Inside the Headlines
In the quarter under review, FAT Brands reported a loss per share of $1.68, missing the Zacks Consensus Estimate of a loss of $1.55 per share. The company reported a loss of $2.60 per share in the year-ago quarter.
In the fiscal fourth quarter, total revenues of $158.6 million topped the consensus mark of $150 million by 5.7%. The top line increased 52.8% on a year-over-year basis as well. The uptrend was driven by a 10.4% increase in royalties and an 80.5% increase in company-owned restaurant revenues.
System-wide sales grew 15.5% in the fiscal fourth quarter compared with the year-ago fiscal quarter. On the other hand, system-wide comps declined 0.6% compared with the prior year.
Operating Results
During the fiscal quarter, total costs and expenses were $161.8 million, up from $136.4 million reported in the year-ago quarter. This was primarily attributable to an increase in the cost of restaurant and factory revenues, and depreciation and amortization expenses.
Adjusted EBITDA of $37 million was up year over year from $19.6 million.
Fiscal 2023 Highlights
For the fiscal year, FAT Brands reported revenues of $480.5 million, up 18% from fiscal 2022 levels. The company reported an annual loss of $5.85 per share, down from a loss of $8.06 per share reported a year ago.
Adjusted EBITDA of $91.2 million was up from the fiscal 2022 level of $88.8 million.
Store Count
In the fiscal fourth quarter of 2023, the company opened 29 new stores, thus taking the fiscal year’s total to 125 new store openings.
Papa John’s International, Inc. (PZZA - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the fiscal fourth quarter, the company registered benefits from the expansion of the global footprint and enhancements in digital solutions and marketing platforms. Also, it stated improvements in domestic company-owned restaurant-level margins and sequential improvement in U.K. sales with franchisees. The company intends to focus on the Back to Better 2.0 growth initiative and accelerate North America development to drive growth.
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis.
The quarter’s results reflect 4.9% rise in guest checks on the back of 6.3% increase in menu prices and a 1% increase in discounts. However, the company cited concerns regarding the anticipated reduction in restaurant sales and adjusted EBITDA in 2024 due to the shift back to a 52-week fiscal year and the impact of sale-leaseback transactions on rent expenses.
Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) reported second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top increased year over year while the bottom line declined from the prior-year quarter figure.
The uptick in top line was primarily backed by sequential improvements in traffic. Also, guest experience enhancements and marketing optimizations added to the positives. However, the company stated issues related to margin pressures stemming from labor cost inflation. The company expects ongoing margin challenges in the short term, particularly in the upcoming fiscal third quarter.
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FAT Brands (FAT) Q4 Earnings Miss, Revenues Beat, Comps Decline
FAT Brands Inc. (FAT - Free Report) reported fourth-quarter fiscal 2023 results, with earnings missing the Zacks Consensus Estimate, while revenues beat the same. The top and the bottom lines increased on a year-over-year basis.
The company’s quarterly results reflect an uptrend in the top line, attributable to an increase in system-wide sales and new restaurant openings. Solid franchisee interest in development opportunities has increased the company’s total pipeline to 1,100 units, including more than 225 development agreements signed in 2023. Also, the acquisition of Smokey Bones early in the fourth quarter has grown the FAT Brands portfolio to 18 iconic restaurant brands with annualized system-wide sales of $2.5 billion.
However, declining comps and increasing costs and expenses partially offset the positive impacts of the above-mentioned tailwinds.
Nonetheless, the company is optimistic about moving into 2024 thanks to its strong brand management platform. It believes that this platform positions it well to efficiently integrate new brands while maintaining a healthy and evolving pipeline for organic growth.
Inside the Headlines
In the quarter under review, FAT Brands reported a loss per share of $1.68, missing the Zacks Consensus Estimate of a loss of $1.55 per share. The company reported a loss of $2.60 per share in the year-ago quarter.
FAT Brands Inc. Price, Consensus and EPS Surprise
FAT Brands Inc. price-consensus-eps-surprise-chart | FAT Brands Inc. Quote
In the fiscal fourth quarter, total revenues of $158.6 million topped the consensus mark of $150 million by 5.7%. The top line increased 52.8% on a year-over-year basis as well. The uptrend was driven by a 10.4% increase in royalties and an 80.5% increase in company-owned restaurant revenues.
System-wide sales grew 15.5% in the fiscal fourth quarter compared with the year-ago fiscal quarter. On the other hand, system-wide comps declined 0.6% compared with the prior year.
Operating Results
During the fiscal quarter, total costs and expenses were $161.8 million, up from $136.4 million reported in the year-ago quarter. This was primarily attributable to an increase in the cost of restaurant and factory revenues, and depreciation and amortization expenses.
Adjusted EBITDA of $37 million was up year over year from $19.6 million.
Fiscal 2023 Highlights
For the fiscal year, FAT Brands reported revenues of $480.5 million, up 18% from fiscal 2022 levels. The company reported an annual loss of $5.85 per share, down from a loss of $8.06 per share reported a year ago.
Adjusted EBITDA of $91.2 million was up from the fiscal 2022 level of $88.8 million.
Store Count
In the fiscal fourth quarter of 2023, the company opened 29 new stores, thus taking the fiscal year’s total to 125 new store openings.
Zacks Rank & Recent Retail-Wholesale Releases
FAT Brands currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Papa John’s International, Inc. (PZZA - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and the bottom line increased on a year-over-year basis.
During the fiscal fourth quarter, the company registered benefits from the expansion of the global footprint and enhancements in digital solutions and marketing platforms. Also, it stated improvements in domestic company-owned restaurant-level margins and sequential improvement in U.K. sales with franchisees. The company intends to focus on the Back to Better 2.0 growth initiative and accelerate North America development to drive growth.
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis.
The quarter’s results reflect 4.9% rise in guest checks on the back of 6.3% increase in menu prices and a 1% increase in discounts. However, the company cited concerns regarding the anticipated reduction in restaurant sales and adjusted EBITDA in 2024 due to the shift back to a 52-week fiscal year and the impact of sale-leaseback transactions on rent expenses.
Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) reported second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top increased year over year while the bottom line declined from the prior-year quarter figure.
The uptick in top line was primarily backed by sequential improvements in traffic. Also, guest experience enhancements and marketing optimizations added to the positives. However, the company stated issues related to margin pressures stemming from labor cost inflation. The company expects ongoing margin challenges in the short term, particularly in the upcoming fiscal third quarter.