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FAT Brands Inc. is a leading multi-brand restaurant company that develops, markets, acquires and manages quick service, fast casual, casual dining and polished casual dining restaurant concepts around the world. We operate primarily as a franchisor of restaurants, where we generally do not own or operate the restaurant locations but rather generate revenue by charging franchisees an initial fra…
The business is unprofitable at the operating level (-8.81% margin). The thesis depends entirely on whether and when it reaches sustainable profitability.
Revenue grew 23.4%, still solid. Margins contracted 13.5pp, which offsets some of the top-line progress.
ROIC dropped from 1.41% to -2.88%, capital efficiency is deteriorating. Negative free cash flow of -$79M. The business is consuming cash, not generating it.
Profitability & Returns
Revenue (TTM)
$574M
▲ +23.4% YoY
Net Income (TTM)
-$226M
▼ -110.7% YoY
Op. Margin
-14.07%
▼ -13.5pp YoY
ROIC
-4.31%
▼ -4.3pp YoY
Cash Flow & Balance Sheet
FCF (TTM)
-$75M
▼ -45.0% YoY
Op. Cash Flow (TTM)
-$65M
▼ -58.0% YoY
Net Debt
$1.48B
Cash & Equiv.
$2M
5Y CAGR: +92.4%
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