Financials - October 2023

Domino's Pizza® Announces Third Quarter 2023 Financial Results

12 Oct, 2023, 06:00 ET

Global retail sales growth (excluding foreign currency impact) of 4.9%; 5.1% (excluding foreign currency impact and closure of the Russia market)

U.S. same store sales decline of 0.6%

International same store sales growth (excluding foreign currency impact) of 3.3%

Global net store decline of 8 stores (excluding closure of the Russia market, global net stores grew by 135)

Diluted EPS up 49.8% to $4.18ANN ARBOR, Mich., Oct. 12, 2023 /PRNewswire/ -- Domino's Pizza, Inc. (NYSE: DPZ), the largest pizza company in the world, announced results for the third quarter of 2023. Global retail sales grew 4.9% in the third quarter of 2023, excluding the positive impact of foreign currency, and grew 5.1% in the third quarter of 2023, excluding the positive impact of foreign currency and the closure of the Russia market. Without adjusting for the impact of foreign currency, but excluding the closure of the Russia market, global retail sales grew 5.3% in the third quarter of 2023. U.S. same store sales declined 0.6% during the third quarter of 2023. International same store sales (excluding foreign currency impact) grew 3.3% during the third quarter of 2023. Diluted EPS for the third quarter of 2023 was $4.18, an increase of 49.8% over the prior year quarter. The Company had third quarter global net store decline of 8 stores, comprised of 27 net U.S. store openings and 35 net international store closures. The Company had 218 gross store openings and 226 gross store closures during the third quarter of 2023. Global and international net store decline reflects the closure of the remaining 143 net Domino's stores in Russia. Excluding the impact of the closure of the Russia market, the Company had third quarter global net store growth of 135 stores, comprised of 27 net U.S. store openings and 108 net international store openings. During the third quarter of 2023, the Company's master franchisee that owned and operated Domino's Pizza® stores in Russia announced its intent to file for bankruptcy with respect to the stores in that market, and, as a result, the Company has excluded the impact of the Russia market from its fiscal 2023 statistical measures, including net store growth, global retail sales growth and global retail sales growth, excluding foreign currency impact. The Company has not received any royalties and fees from the operations of the Russia market subsequent to the Russian invasion of Ukraine in February 2022. For additional details, refer to the Russia Market Update and Comments on Regulation G sections included below. Subsequent to the end of the third quarter of 2023, on October 10, 2023, the Company's Board of Directors declared a $1.21 per share quarterly dividend on its outstanding common stock for shareholders of record as of December 15, 2023, to be paid on December 29, 2023. The Company will host its Investor Day on December 7, 2023 at the Company's headquarters in Ann Arbor, Michigan. "We continue to execute on our initiatives to drive sustainable growth in the U.S.," said Russell Weiner, Domino's Chief Executive Officer. "Our 'Summer of Service' initiative and the hard work of our franchisees and team members have brought delivery times back to pre-pandemic levels. Domino's Rewards is engaging more customers, and our integration with Uber's marketplace is on track. We are ready and excited to deliver the incremental orders both programs will bring in 2024 and beyond."

View full version at Domino's

Apollo to take Wagamama owner Restaurant Group private for $623 mln

By Eva MathewsOctober 12, 20235:16 AM EDT Updated 4 days ago

A sign of Wagamama restaurant is seen in London, Britain, October 5, 2020. REUTERS/Hannah McKay

1. Summary

2. Companies

1. Shares up over 37%; best performer across London stocks

2. TRG shareholders to get 65p for each share held

3. Deal expected to close in early 2024

Oct 12 (Reuters) - Wagamama owner The Restaurant Group (RTN.L) has agreed to be taken private by private equity firm Apollo Global (APO.N) for 506 million pounds ($623.44 million) after a year of financial struggles and investor pressure.

Under the terms of the deal announced on Thursday, The Restaurant Group's (TRG) shareholders will get 65 pence in cash for each share held, a premium of about 34% to the stock's last closing price.

Shares in the small cap constituent (.FTSC) jumped 37.1% to 66.5 pence, its highest percentage gain since April 2020.

Over the past year, the group, which owns about 400 restaurants and pubs across the UK, has struggled with falling margins amid soaring costs and sluggish recovery post-pandemic.

There has also been pressure from shareholders and activist investors Irenic Capital and Oasis Management in recent months to change management and improve profitability.

In Thursday's announcement, the companies said they had received undertakings from both investors, who together own a nearly 20% stake in TRG, to vote in favour of the deal.

Chairman Ken Hanna agreed to step down last month, after the company forecast higher annual profits. TRG, which owns popular Japanese noodle chain Wagamama, also agreed to sell its loss-making Frankie & Benny's and Chiquito brands to Cafe Rouge owner Big Table Group, as part of efforts to bolster margins and cut debt.

The company's board has unanimously recommended that shareholders vote in favour of the deal, which has an enterprise value of 701 million pounds and is expected to be complete in early 2024. Apollo previously put forth about three buyout proposals for TRG.

US-based Apollo said it believes that the development of the company will be best served as a private business, with access to capital and the benefit of a long-term investment approach.

"We understand that this was an unsolicited approach, so it is possible that it flushes out another bid," Stifel analysts said in a note, adding that they, however, expect the deal to go through.

Another analyst at Shore Capital said the offer price was "too low" given the company's efforts to improve margins and reduce leverage.

View source version at Wagamama

The Greene Turtle raises $6M from Bill Ackman's Table Management The 36-unit sports bar chain will put the funding toward growing its sportsbook business and its new sister concept, Clark Crew BBQ. By Joe Guszkowski on Oct. 04, 2023 The Greene Turtle chain includes two sportsbooks. The Greene Turtle sports bar franchise has landed a $6 million equity investment from Table Management, the family office run by billionaire Bill Ackman. The 36-unit Maryland-based chain plans to use the funding to grow a fledgling sportsbook business and open more units of its new sister concept, Clark Crew BBQ. The Greene Turtle has been growing quickly coming out of the pandemic, opening six new restaurants including two sportsbooks. And last June, the chain merged with one-unit Clark Crew, forming a new company, ITA Group Holdings. The multiple growth vehicles caught the attention of Table, an offshoot of Ackman’s hedge fund, Pershing Square Capital Management. “The rollout of two sportsbooks in the span of one month, the strong unit economics for the latest vintage Turtles and ability to expand its franchise footprint coupled with new Clark Crew locations puts the business on a great trajectory for years to come,” said Jason Pinsky, an investor at Table, in a statement. Maryland legalized online sports betting in 2021, clearing the way for restaurants to get in on the action. The Greene Turtle opened its second sportsbook last week, in Towson, Md. Visitors to the 15,000-square-foot, two-story restaurant can place bets at kiosks or with a live teller and watch sports on TVs throughout the building. The sportsbook is operated by betPARX. Now legal in 34 states, sports betting is finding a niche in restaurants. Hooters, Dave & Buster’s and now The Greene Turtle are among the chains exploring the additional revenue stream. Founded in 1976, The Greene Turtle is known as a sports-viewing destination serving elevated bar food and a wide beer selection. It has locations in six East Coast states and Washington, D.C.

View source version at The Greene Turtle

Krispy Kreme looks to sell Insomnia Cookies unit

October 3, 202311:49 AM EDT Updated 13 days ago

Oct 3 (Reuters) - Krispy Kreme (DNUT.O) is exploring options for its Insomnia Cookies unit including a sale, the company said on Tuesday, as it renews its focus on its main business of selling doughnuts.

The move comes at a time when several U.S. packaged food companies, including Campbell Soup (CPB.N) and JM Smucker (SJM.N), have struck deals to revamp their brand portfolios amid fading pandemic-era growth and benefits from higher prices.

Insomnia Cookies, which operates in three countries with over 250 bakeries, is expected to deliver revenues of about $230 million in fiscal year 2023, Krispy Kreme said.

For the full year 2022, Krispy Kreme earned a net revenue of $1.53 billion.

Krispy Kreme had acquired a majority stake in Insomnia, the cookie delivery company known for serving warm cookies all day and late into the night, in 2018 but the terms of the deals were not disclosed then.

It was not immediately clear how much stake Krispy Kreme held in Insomnia.

On Tuesday, Krispy Kreme said it now wanted to focus on its core strategy of producing, selling and distributing fresh doughnuts daily.

Krispy Kreme has hired Evercore and Morgan Stanley to act as financial advisors.

The company's shares were up 3% before the bell.

View source version at Krispy Kreme

A Burger King franchisee gets sold out of bankruptcy, and a big buyer is Burger KingMeridian Restaurants, the large operator that declared bankruptcy in March, is selling 70 of its 91 remaining restaurants to several different franchisees as well as the brand following an auction this month. By Jonathan Maze on Sep. 27, 2023

Meridian Restaurants is selling 67 of its 91 restaurants following an auction.

Several different buyers are acquiring Burger King restaurants out of bankruptcy after winning an auction for the assets of large franchisee Meridian Restaurants Unlimited earlier this month. But the biggest buyer is, apparently, Burger King itself. Seventy of the 91 restaurants still operated by Meridian were sold in a 10-hour auction held earlier this month, according to court documents, for a total of about $17.5 million.

Four franchisees, mostly existing Burger King franchisees, are buying restaurants in specific states. But Burger King was the largest individual buyer, agreeing to pay $4.4 million for 29 restaurants in Utah and Montana. KRAF Inc., an Arizona Burger King franchisee that had provided the initial “stalking horse” bid for the restaurants out of bankruptcy, is paying $7 million for seven locations in that state, though $1.5 million of that is reserved for construction to repair hurricane damage on one of the locations. Kansas King is acquiring 16 locations in Nebraska and Kansas for $2.2 million, a deal that includes $1.5 million in “support funding” from Burger King itself. Dakota Restaurant Partners is acquiring a dozen locations in North and South Dakota, Minnesota and Montana for $3.4 million. Snake River Foods, a Burger King operator out of Idaho, is buying three Montana units for just over $600,000. A bankruptcy court was set to approve the deals this week. It is unclear as of yet what will happen to the restaurants that are not sold but there are some local reports of closed locations in the aftermath of the auction. It also suggests that only just more than half of the 120 restaurants Meridian did operate before it filed for bankruptcy in March will survive the process still open. Burger King struggled coming out of the pandemic, as perpetually lower-than-average unit volumes proved problematic as costs surged in late 2021 and 2022 and the chain’s sales did not grow like those of rivals McDonald’s, Wendy’s and Taco Bell. The brand closed about 60 locations last year and more have closed so far this year amid bankruptcy filings and other closures. Meridian was one of two major Burger King operators to file for bankruptcy earlier this year when it filed in March. It closed restaurants entering the filing and closed several others after seeking debt protection. And, though the company said its sales and profits were coming back, Burger King itself demanded a sale, arguing that the operator was spread too far and wasn’t a strong enough operator to warrant continuing in the system. Meridian’s restaurants are in several states, from Minnesota to Utah. Burger King is pushing to focus on smaller operators with 50 or fewer locations, and not so far apart. “In an ideal world, I’d like it if they could drive to all their restaurants,” Josh Kobza, CEO of Burger King parent company Restaurant Brands International, said in May. Burger King has shown some improvement of late, however, as sales have improved and franchisees have worked on operations. The other operator that filed for bankruptcy this year, Toms King, sold for $33 million in April to multiple buyers.

View source version at Burger King

FAT Brands Announces Acquisition of Smokey Bones Barbecue Chain

September 25, 2023 18:00 ET

Global Franchisor Doubles Down on Polished Dining Segment

LOS ANGELES, Sept. 25, 2023 (GLOBE NEWSWIRE) -- FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) today announces it has acquired the Smokey Bones Bar & Fire Grill restaurant chain from an affiliate of Sun Capital Partners, Inc. The acquisition marks the Company’s first foray into barbecue and expands FAT Brands’ portfolio of polished dining chains, which currently includes Twin Peaks. The purchase is expected to increase annual adjusted EBITDA by approximately $10 million, and bring 61 new corporate locations under FAT Brands’ umbrella. The $30 million transaction was funded from the Company’s existing securitization facilities.

“We continue to be selective and opportunistic in our acquisition strategy, targeting brands that are both scalable and synergistic with our existing platform,” said Rob Rosen, Co-CEO of FAT Brands. “We are pleased to add another polished dining brand, which will provide more options for our sales team to offer our franchise partners to further their new unit development.”

“As we have spent the year focusing on digesting past acquisitions, we’ve also been amplifying the explosive growth in our polished dining vertical,” said Andy Wiederhorn, Chairman and Founder of FAT Brands. “Having a strong player in the barbecue space provides another arrow in our quiver for the polished dining segment and opens the door for additional growth strategies for our sister brands. We look forward to generating impressive results, similar to our Johnny Rockets integration, which we also acquired from an affiliate of Sun Capital Partners.”

“We are excited to become a part of the FAT Brands family and benefit from their purchasing power and scale,” said Hal Lawlor, President of Smokey Bones. “Additionally, we see great opportunity in being a part of a leading global franchising company to further our growth with new franchised locations.”

Kroll Investment Banking acted as exclusive sell-side M&A advisor to Smokey Bones and Sun Capital Partners on the transaction.

For more information, visit www.fatbrands.com.

About FAT (Fresh. Authentic. Tasty.) Brands FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 17 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns approximately 2,300 units worldwide. For more information, please visit www.fatbrands.com.

About Smokey Bones The Masters of Meat. Smokey Bones Bar & Fire Grill is a full-service restaurant chain delivering great barbecue, award-winning ribs, perfectly seared steaks and memorable moments in 61 locations across 16 states. Smokey Bones serves lunch, dinner, and late night, and has a full bar featuring a variety of bourbons and whiskeys, a selection of domestic, import and local craft beers, and several signature handcrafted cocktails. Smokey Bones offers a variety of meats that are slow-smoked, fire-grilled, and available for dine-in, pick-up, online ordering, catering, and delivery. Smokey Bones offers a 10 percent discount to active duty and veterans with ID. For additional information and a list of locations nationwide, please visit www.SmokeyBones.com. Smokey Bones, Meat is What We Do!

View source version at FAT Brands