Thursday, November 12, 2020

FAT Brands Inc. (FAT)

Good Results Tempered by COVID; Johnny Rockets to Impact Fourth Quarter

FAT Brands Inc is a multi-brand restaurant franchising company. It develops, markets, and acquires predominantly fast casual restaurant concepts. The company provides turkey burgers, chicken Sandwiches, chicken tenders, burgers, ribs, wrap sandwiches, and others. Its brand portfolio comprises Fatburger, Buffalo's Cafe and Express, and Ponderosa and Bonanza. The company's overall footprint covers nearly 32 countries. Fatburger generates maximum revenue for the company.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

3Q20 Results. Total revenue was $4.1 million, down from $6.5 million last year. Lower royalties and franchise fees were the key drivers. Net loss was $568,000, or $0.05 per share, compared to net income of $1.2 million, or $0.10 per share last year. We had forecast revenue of $3.6 million and a net loss of $1.6 million, or $0.11 per share.

Sales Improving But Not Yet Back to Pre-Covid Levels.  Systemwide sales increased 53% sequentially, improving each month of the quarter, but the $73.1 million 3Q total was below the $84.7 million in the first quarter. Roughly 21% of the existing store count remains closed, mostly concentrated in the steak houses and Johnny Rockets. If COVID restrictions continue to ease, we expect the majority of ...

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.