FAT Brands reported another quarter of revenue growth while operating at a loss largely due to the acquisition of Smokey Bones last year, which created both additional revenue and additional debt for the company. ‘business. The company reported a 2.7% decline in same-store sales growth for the third quarter ended September 29, as the company continues to focus on increased development momentum with 1,000 stores in the pipeline.

“We continue to prioritize accelerated growth in our fine casual category, particularly through Twin Peaks, our fastest-growing concept,” Ken Kuick, co-CEO of FAT Brands, said in a statement. “Since the start of the year, we have opened nine new lodges, bringing our total to 115 locations. We also completed our first conversion of Smokey Bones to Twin Peaks in Lakeland, Florida during the third quarter, with our second conversion underway and several more planned for next year.

Related: FAT Brands Opens First Twin Peaks-Smokey Bones Conversion

Conversions of underperforming Smokey Bones restaurants have been part of FAT Brands’ strategy for the past few quarters. The company is also still planning to make Twin Peaks public, but now with Smokey Bones as a combined entity. FAT Brands said that in May, the company submitted a registration statement with the Securities and Exchange Commission, which is the next step toward going public.

However, as the end of fiscal 2024 approaches, FAT Brands executives have now said that Twin Peaks/Smokey Bones may seek an alternative transaction, which could include options such as a direct public listing or the recourse to a special purpose acquisition company, or SPAC. .

Related: FAT Brands reports same-store sales decline of 1.6% as company continues to focus on growth

Either way, the goal is for FAT Brands to pay down its debts and leverage its balance sheet so the company can become profitable, including refinancing Twin Peaks’ securitization debt.

“FAT Brands will seek to monetize its investment in Twin Peaks over time and use it to repay other debt and reduce FAT Brands’ overall debt load,” said Andy Wiederhorn, president of FAT Brands, during the This week’s earnings call. “I would expect that to happen later in 2025 and that includes repurchasing some preferred shares that are expensive and that we need to repurchase. It just takes a long time due to market conditions.

For the third quarter ended September 29, FAT Brands opened 22 new restaurants, with 29 additional openings planned for the final quarter of 2024. The company reported total revenue growth up 31.1% to 143.4 million, compared to $109.4 million in the third quarter of 2024. 2023. Net loss was $44.8 million, or $2.74 per share, compared to $24.7 million, or $1.59 per diluted share, in the third quarter of 2023.

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