Operations

FAT Brands CEO expecting sales rebound

May 11, 2021

Although his company reported a net loss of $2.4 million, or 20 cents per share, during Q1, FAT Brands Inc. CEO Andy Wiederhorn said he expected the company, which owns Fatburger and eight other restaurant brands, to emerge from COVID-19 in a strong position.

"The first quarter showed a steady progression of sales improvements across all of our brands with particular strength seen at Fatburger, Buffalo's and Hurricane," he said in a company press release. "Our pipeline of new locations is in excellent shape with an expected acceleration in growth over the coming quarters."

Q1 total revenues were up 50% to $6.6 million for the 13-week period ending March 28, compared to $4.4 million in the first quarter of 2020.

Excluding Johnny Rockets which FAT acquired on Sept. 21, 2020, as well as advertising revenues, revenues were $3.54 million — up from $3.49 million in the first quarter of 2020.

Wiederhorn said he was also happy with Johnny Rockets' performance and expects the reopening of special venues during the second and third quarters of 2021.

"We are optimistic for the year ahead, as we expect a continued rebound in sales as COVID-19 restrictions further ease and availability of the vaccines continue to expand," he said. "Our third successful whole business securitization transaction completed in April of 2021, in combination with our publicly traded preferred stock and common stock, provides optionality to fund potential acquisitions, lower our cost of capital and drive shareholder value."

Q1 2021 highlights

• Total revenues improved 50% to $6.6 million compared to the first quarter of 2020.
• System-wide sales growth of 35.3%.
• United States sales growth of 28.1%.
• Rest of world sales growth of 54.2%.
• System-wide same-store sales growth of 7.8%.
• United States same-store sales growth of 8.7%.
• Rest of world sales growth of 4.9%.
• Five openings.
• Net loss of $2.4 million or 20 cents per share.

FAT Brands owns nine restaurant brands: Fatburger, Johnny Rockets, Buffalo's Cafe, Buffalo's Express, Hurricane Grill & Wings, Elevation Burger, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses. It has 651 stores system-wide as well as 36 under construction to open in 2021.