FAT Brands (FAT) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $142M, down 6.5% from $152M in Q1 2024, with adjusted EBITDA at $11.1M, and net loss widening to $46M ($2.73/share) from $38.3M ($2.37/share) last year.

• Spun off Twin Hospitality Group, distributing a $50M dividend and retaining majority voting power, enhancing transparency and capital access.

• Opened 23 new stores in Q1 2025, targeting over 100 openings for the year, and expanded internationally with agreements for 40 new locations in France.

• Strategic focus on refranchising, cost savings, debt reduction, and transitioning to a nearly 100% franchised model.

• Leadership changes included Rob Rosen moving to a consulting role and Taylor Wiederhorn appointed co-CEO.

Financial highlights

• System-wide sales were $571.1M, down 1.8% year-over-year, with same-store sales declining 3.4%.

• Restaurant sales declined to $99.4M from $105.9M, and royalties were $21.9M, nearly flat year-over-year.

• Adjusted net loss was $38.7M ($2.32/share) versus $32.9M ($2.05/share) in Q1 2024.

• General and administrative expenses rose to $33M, mainly due to higher litigation costs.

• Cash and restricted cash at March 30, 2025, was $59.3M, down from $67.4M at year-end 2024.

Outlook and guidance

• On track to open over 100 new restaurants in 2025, with 23 opened in Q1 and a pipeline of 1,000+ signed agreements.

• Projected $50M incremental annual adjusted EBITDA from the development pipeline once operational.

• Plans to re-franchise 57 company-owned Fazoli's restaurants and expand manufacturing and international operations.

• Anticipates raising $75M–$100M in equity in 2025, with 75% allocated to debt reduction; timing delayed due to market volatility.

• Management expects sufficient liquidity for at least the next 12 months through cash on hand, operations, and capital markets.