Twin Hospitality Group Reports 5.4% Revenue Decline and $12.1 Million Net Loss in Q1 2025

Twin Hospitality Group Inc. reported a decline in financial performance for the first quarter of 2025, with total revenue decreasing by 5.4% to $87.1 million, down from $92.1 million in the same period last year. The decrease was primarily attributed to lower same-store sales and the closure of one Smokey Bones location during its conversion to a Twin Peaks lodge. Company-owned restaurant sales fell by 5.9% to $78.4 million, while franchise revenue saw a slight decrease of 0.8% to $8.7 million. The company recorded a net loss of $12.1 million, compared to a loss of $9.2 million in the prior year.

In terms of operational metrics, Twin Hospitality Group's total restaurant footprint remained at 171 locations as of March 30, 2025, with 74 domestic franchised Twin Peaks restaurants, seven international franchised locations in Mexico, 35 domestic company-owned Twin Peaks restaurants, and 55 domestic company-owned Smokey Bones restaurants. The company has a robust pipeline of over 100 signed franchised units, indicating potential for future growth. However, the closure of underperforming locations and the temporary closure for renovations impacted overall sales.

The company's costs and expenses also reflected changes, with total costs rising to $88.2 million from $90.7 million year-over-year. Notably, food and beverage costs decreased by 5.2% to $21.2 million, while labor and benefits costs decreased by 5.1% to $25.3 million. Despite these reductions, the percentage of costs relative to company-owned restaurant sales increased, indicating challenges in managing operational efficiency amid rising ingredient prices and wage inflation.

Looking ahead, Twin Hospitality Group aims to expand its franchise locations, which will require significant liquidity primarily from franchisees. The company reported cash and restricted cash totaling $28.3 million as of March 30, 2025, an increase from $25.9 million at the end of the previous fiscal year. The management expressed confidence in their ability to meet business requirements and plans for the next 12 months, despite the current operational challenges. The company continues to evaluate its strategic options, including potential acquisitions of operating restaurants to convert them into franchise locations.