FAT Brands (FAT) Q2 2024 earnings summary

Executive summary

• Total revenue for Q2 2024 increased 42.4% year-over-year to $152 million, primarily due to the Smokey Bones acquisition and new restaurant openings.

• System-wide sales grew to $614.7 million, up 8.6% year-over-year.

• Adjusted EBITDA was $15.7 million, down from $23.1 million last year, but up 30.8% year-over-year when excluding Employee Retention Tax Credits.

• Net loss widened to $39.4 million ($2.43 per diluted share) from $7.1 million ($0.53 per share) in the prior year quarter.

• 24 new stores opened during the quarter, supporting growth initiatives.

Financial highlights

• Revenue grew 42.4% to $152 million, driven by acquisitions and new openings.

• System-wide sales rose to $614.7 million from $572.7 million year-over-year.

• Adjusted EBITDA was $15.7 million, compared to $23.1 million in Q2 2023; excluding ERTC, adjusted EBITDA increased 30.8%.

• Net loss was $39.4 million, or $2.43 per diluted share; adjusted net loss was $30.9 million, or $1.93 per share.

• Costs and expenses rose 75.2% to $154.6 million, with G&A expenses up 197.2% to $29.6 million.

Outlook and guidance

• Targeting over 120 new unit openings in 2024, with 12–15 new Twin Peaks lodges expected by year-end.

• Over 1,100 units in the development pipeline, expected to generate $50–$60 million in incremental adjusted EBITDA when opened.

• Twin Peaks and Smokey Bones combined entity submitted confidential registration for a potential IPO; proceeds would be used to deleverage and fund growth.

• Management expects sufficient liquidity for at least the next twelve months via cash, operations, and capital markets access.

• Continued focus on franchisee development, co-branding, and leveraging synergies across the portfolio.