FAT Brands Inc. Reports Notable Revenue Growth Amidst Operational Losses in Q4
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Revenue Growth: FAT Brands Inc. (NASDAQ:FAT) saw a substantial 52.8% increase in total revenue for Q4 2023, reaching $158.6 million.
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Operational Challenges: Despite revenue growth, the company reported a loss from operations of $3.1 million in Q4 2023.
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Net Loss Improvement: Net loss improved to $26.2 million in Q4 2023 from $70.8 million in the same quarter the previous year.
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Adjusted EBITDA Rise: Adjusted EBITDA increased to $27.0 million in Q4 2023, up from $19.6 million in Q4 2022.
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Annual Performance: For the full fiscal year 2023, FAT Brands Inc. reported an 18.0% increase in total revenue and a reduced net loss compared to 2022.
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Store Expansion: The company opened 125 new stores in 2023, with 29 in Q4, and signed over 225 development agreements.
On March 7, 2024, FAT Brands Inc. (NASDAQ:FAT) released its 8-K filing, detailing the fiscal fourth quarter and full fiscal year 2023 financial results. The company, a multi-brand restaurant franchising entity, operates 18 iconic brands with a global presence. FAT Brands generates revenue primarily through franchise fees and royalties, while also directly owning and operating certain restaurant locations.
The fourth quarter saw a significant revenue increase to $158.6 million, a 52.8% jump from the previous year's quarter. This growth was driven by a 10.4% increase in royalties and an 80.5% surge in company-owned restaurant revenues, bolstered by new openings and the acquisition of Smokey Bones. However, the quarter also experienced a slight system-wide same-store sales decline of 0.6%.
Despite the revenue uptick, FAT Brands faced operational challenges, reporting a loss from operations of $3.1 million, which is an improvement from the $32.6 million loss in Q4 2022. The net loss also improved significantly to $26.2 million, or $1.68 per diluted share, compared to a net loss of $70.8 million, or $4.39 per diluted share, in the same quarter of the previous year.
For the full fiscal year 2023, FAT Brands Inc. reported an 18.0% increase in total revenue, reaching $480.5 million. The company also saw a system-wide sales growth of 6.9% and a same-store sales growth of 0.8%. The income from operations turned positive at $22.3 million, contrasting with the previous year's operational loss. However, the net loss for the year stood at $90.1 million, or $5.85 per diluted share, showing an improvement from the $126.2 million net loss in 2022.
Adjusted EBITDA for the quarter was $27.0 million, up from $19.6 million in Q4 2022, indicating a stronger underlying business performance. The adjusted net loss was also reduced to $17.3 million, or $1.15 per diluted share, compared to $43.0 million, or $2.70 per diluted share, in the prior year's quarter.
