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FAT Brands (FAT) Unveils Its Co-Branded Store in Happy Valley

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FAT Brands Inc. (FAT - Free Report) opens its very first co-branded store comprising its subsidiaries, Great American Cookies and Marble Slab Creamery, in Happy Valley, OR. This co-branded store marks the debut of the two brands in the Pacific Northwest location.

FAT Brands is optimistic about the new store venue, as this step will help it focus on expanding its footprint in a new market. The company believes that this new opening will help it to expand its products’ reach to the residents in the greater Portland area and enhance its growth momentum.

FAT’s Unit Expansion Initiatives

FAT Brands’ focus on unit expansion through new openings, acquisition of additional brands and restaurants, along with the development of existing brands, have contributed to its growth trend. As of Jun 25, 2023, the company’s services are available in approximately 2,300 locations, which include opened and under construction units.

Recently, the company signed various new development deals regarding the opening of 30 new co-branded and franchised locations in Iraq. This includes 12 co-branded Fatburger and Buffalo's Express locations, 10 co-branded Great American Cookie and Marble Slab Creamery relocations and 10 Hot Dog on a Stick locations. The company anticipates the developments to take place over the next five years.

During the first half of fiscal 2023, FAT Brands opened 66 new locations, which included 25 new unit openings during the fiscal second quarter. In the year so far, the company has signed franchise development deals for more than 150 new locations, bringing its pipeline to over 1,100 signed agreements for new units over the next few years. For fiscal 2023, the company expects to open 175 new units, reflecting 25% growth in new unit openings from the prior year.

Price Performance

Shares of FAT gained 44.5% in the year-to-date period, outperforming the Zacks Retail - Restaurants industry’s 5% growth. The upside was backed by pent-up demand, new store openings and product expansion efforts. Also, the emphasis on Twin Peaks acquisition bodes well. Going forward, the company intends to focus on the high-growth sports lodge category and acquiring concepts (with Twin Peaks conversion prospects) to drive growth.

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Image Source: Zacks Investment Research

Meanwhile, earnings estimates for fiscal 2023 have increased in the past 30 days, depicting analysts’ optimism about the stock’s growth potential.

Zacks Rank

FAT Brands currently carries a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks from the Retail-Wholesale sector are Amazon.com, Inc. (AMZN - Free Report) , BJ's Restaurants, Inc. (BJRI - Free Report) and Builders FirstSource, Inc. (BLDR - Free Report) .

Amazon currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AMZN delivered a trailing four-quarter earnings surprise of 41%, on average. Shares of the company have gained 8.3% in the past year. The Zacks Consensus Estimate for AMZN’s 2023 sales and earnings per share (EPS) indicates growth of 11.1% and 214.1%, respectively, from the previous year’s reported levels.

BJ's Restaurants currently sports a Zacks Rank of 1. BJRI delivered a trailing four-quarter earnings surprise of 121.2%, on average. Shares of the company have gained 15.7% in the past year.

The Zacks Consensus Estimate for BJRI’s 2023 sales and EPS indicates growth of 5.6% and 435.3%, respectively, from the previous year’s reported levels.

Builders FirstSource currently sports a Zacks Rank of 1. BLDR has a trailing four-quarter earnings surprise of 52.2%, on average. Shares of the company have rallied 147.7% in the past year.

The Zacks Consensus Estimate for BLDR’s 2023 sales and EPS indicates a decline of 23.3% and 29.6%, respectively, from the previous year’s reported levels.

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