Upcoming acquisitions for Fat Brands, bestsellers for STK, Kona Grill, US Foods


Fatburger’s parent company is poised to add at least two brands to its portfolio. The premium steakhouse brand STK is on track to hit $ 13.5 million in annual sales per unit. And US Foods, the industry’s second-largest distributor, shipped more food to restaurants for Mother’s Day than it has in five years.

Obviously, normality is breaking out everywhere.

The quadruple increase in generalized vaccinations, stimulus checks, rampant cabin fever and the easing of restaurant seating limits caused a real spring awakening for smaller-cap public catering companies in March and April.

Here’s a look at the recently released financial results for several.

Parent of Fatburger: 2 acquisitions in progress

Fat Brands, the franchisor of 11 brands to date, anxious to acquire, is set to add two more operations to its fold, including one with several restaurant brands, CEO Andy Wiederhorn revealed Tuesday evening to the analysts and investors.

“We have nine or 10 different acquisition targets that we are currently evaluating,” said Wiederhorn. “There are two, hopefully, that we can announce in the second quarter and maybe one or two more before the end of the year.”

He didn’t reveal who he was kicking, but said the contestants “range from quick-laid-back to laid-back, like the brands we own that work really well.” In addition to Fatburger, Fat Brands runs Johnny Rockets, Buffalo’s World Famous Wings, Ponderosa Steakhouse, Bonanza Steakhouse, Elevation Burger, Yalla Mediterranean, Hurricane Grill & Wings and a riff on Hurricane called BTW, for burgers, tacos and wings.

Wiederhorn noted that the market is teeming with private equity buyers and sellers can still adapt to the new realities of a pandemic.

“I’ve seen founders be a lot more emotional in 2021, late 2020, than I expected, some of them fixing on 2019 prices or valuations and really not ready to make a deal.” , he explained.

He added that some homeowners looking for an exit are reluctant to sell at this time because they have received paycheck protection program funding and want to make sure the loans are canceled.

Not all brands currently in charge of Wiederhorn are buzzing. He revealed that 107 restaurants on a basis of 651 are still closed, mainly in Johnny Rockets, Bonanza and Ponderosa. In contrast, wing brands Hurricane and Buffalo topped their 2019 sales levels in the first quarter, with same-store gains of 10% and 9% respectively.

Overall, Fatburger matched its $ 2.4 million loss in the first quarter of 2020 to the first quarter of the current year on revenue of $ 4.9 million, an increase of 48%.

Parent of STK and Kona Grill: Experiential Dining is Back

Upscale operator The One Group sums up its main attraction as ‘dining vibe’, an elegant experience that relies on ambiance, culinary craftsmanship and peerless service. As he discovered when the pandemic hit, it’s hard to deliver these benefits when customers can’t enter a restaurant’s dining room.

But with increased seating capacities in the markets served by the refined brands of One, STK and Kona Grill, “our teams effectively execute all operational, marketing and culinary strategies, ”CEO Manny Hilario told financial analysts this week. In addition, “consumers, more than ever when fully immunized, are looking for a fun and differentiated social moment”.

As a result, he said, STK’s same-store sales in April jumped 47.7% from the pre-pandemic level of two years ago, and Kona Grill’s comps jumped by 18.6%. In dollar terms, sales hit $ 261,000 per week in the most recent month, while surpassing $ 97,000 per week in Kona.

“At STK, we continue to see a growing momentum in date nights and social events, which has more than replaced business travelers and corporate private events, a layer of activity that we plan to resume and further improve our unit volumes, ”said Hilario. He also noted that the resumption of the brunch service has been a key sales boost for both brands.

One group lost $ 60,000 in the first quarter, compared to a loss of $ 4.4 million a year ago. Revenue fell 24% to $ 50.5 million.

US Foods: independents buy again

Independent restaurants ordered more cases of supplies from US Foods in April than in the same pre-pandemic 2019 period, signaling a rebound for the industrial sector hardest hit by the pandemic.

“In markets where local jurisdictions allow more than 50% seats, volume is well ahead of 2019,” US Foods CEO Pietro Satriano told financial analysts. “The recovery we have seen over the past few months and our rebound in sales in markets that are mostly open gives us confidence that the industry will fully recover or even surpass 2019 case volume levels.”

Of note, he added: “TMother’s Day week we just wrapped up on Saturday saw the highest shipments to independent restaurants for traditional Mother’s Day weekly activities in five years, with a 6% jump from Mother’s Day week in 2019. “

Satriano said checkout shipments to chain restaurants also surpassed 2019 levels in March and April of the current year.

The distributor lost $ 24 million in the first quarter, down from a deficit of $ 132 million a year ago, on revenues of $ 6.3 billion.


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