Twin Hospitality Group Inc. (TWNP)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 was mixed: revenue declined 5.4% to $87.1M, operating loss was $1.1M, net loss widened to $12.1M, and Adjusted EBITDA fell to $5.1M amid sales deleverage and the transitional impact from Smokey Bones conversions .
• Twin Peaks brand performance remained a relative bright spot: system-wide sales grew 5.1% to $146.2M, restaurant-level margin held at 16.9% (-50 bps YoY), and alcohol mix near 50% continues to differentiate margins and traffic drivers .
• Development cadence was lowered to three to four 2025 openings (from prior nine to eleven) due to construction delays; equity-raise timing also slipped, though management reiterated the 12-month target to raise $75–$100M and use 75% to delever .
• Consensus estimates (EPS/Revenue/EBITDA) from S&P Global were not available for Q1 2025, limiting beat/miss framing; the stock narrative will hinge on unit-growth recalibration, deleveraging progress, and sustained Twin Peaks brand strength .

What Went Well and What Went Wrong

• What Went Well

  • Twin Peaks system-wide sales increased 5.1% YoY to $146.2M, supported by new company-owned lodges; Twin Peaks revenue rose 5.9% to $51.0M despite a 2.7% SSS decline at company-owned units .
  • Premium beverage-led positioning continues to differentiate: “alcohol comprising nearly 50% of restaurant revenue,” driving higher-margin mix versus casual peers .
  • Customer sentiment momentum: Twin Peaks won the Black Box Intelligence 2025 Voice of the Customer Award; management highlighted category-leading scores across service, F&B, ambiance, value, and intent to return .
  • “Same-store sales improved sequentially throughout the quarter,” with March up 0.4% aided by NCAA tournament timing and the Easter shift .

• What Went Wrong

  • Consolidated revenue declined 5.4% to $87.1M; adjusted EBITDA fell to $5.1M from $7.1M; restaurant-level contribution margin compressed to 11.2% (-240 bps YoY) on sales deleverage and Smokey Bones drag .
  • Twin Peaks SSS decreased 1.5% (company-owned -2.7% and franchise -1.0%), with weather and macro cited as headwinds; Smokey Bones revenue fell 17.8% as conversions and closures weighed .
  • Interest expense remained elevated at $10.8M; net loss widened to $12.1M; Smokey Bones restaurant-level margin dropped to 4.4% (from 10.1% YoY), and management expects continued pressure as higher-performing units close for conversion .
  • 2025 openings plan cut to 3–4 due to construction delays; timing for the first equity tranche slipped given market volatility (still targeting $75–$100M over 12 months, with 75% to debt reduction) .

Financial Results

Consolidated results (oldest → newest)

Margins and operating ratios (company-owned base unless noted)

Segment and revenue composition

KPIs (Q1 2025 unless noted)

Note: EPS was not disclosed in the Q1 2025 materials provided; net loss is presented above .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We increased system-wide sales at Twin Peaks by 5.1% to $146.2 million, driven by the strength of our new company-owned restaurants.”
• “Our focus on high-margin beverage sales continues to drive exceptional performance, with alcohol comprising nearly 50% of restaurant revenue.”
• “Twin Peaks was awarded the Black Box Intelligence 2025 Voice of the Customer Award…our scores are higher in every category relative to the broader casual dining segment.”
• “Due to construction delays, we now plan to open three to four new units this year.”
• “We committed to raising between $75 million and $100 million of equity in 2025…While we anticipated securing the first one-third by April, current market conditions impacted our near-term ability…we are confident in achieving our full annual equity target over the next 12 months.”

Q&A Highlights

• No Q&A was held on the Q1 2025 call; management delivered prepared remarks only .
• Prior-quarter context (Q4 2024 Q&A):
  • Pricing: rolling ~200 bps into year-end; preference to protect value proposition and seek efficiencies over broad price increases .
  • Conversion capex: ~$4.3M–$4.7M per Smokey Bones conversion vs $6.5M–$7.5M new builds; faster paybacks .
  • Closures: ~9 Smokey Bones closures targeted in 2025; conversions and closures will drag near-term margins .
  • Development cadence: US-heavy with a couple of Mexico openings; more weighted to 2H given construction/permits .
  • Financing: committed to raise $100M equity tied to securitization covenants; aim to avoid selling at depressed prices via structure/preferred alternatives .

Estimates Context

• S&P Global consensus for Q1 2025 (EPS, Revenue, EBITDA) was not available at the time of analysis, preventing a definitive beat/miss framework; Q1 actual revenue ($87.1M) and Adjusted EBITDA ($5.1M) are shown above from company filings .
• Implication: Street models will likely reduce 2025 unit-openings and embed continued Smokey Bones drag, while maintaining Twin Peaks margin resiliency and mix benefits; we would watch for estimate revisions post call as visibility on equity timing and conversion cadence improves .
• Note: Estimates data sourced from S&P Global; consensus was unavailable for TWNP at time of analysis.*

Key Takeaways for Investors

• Twin Peaks brand health remains solid (system-wide +5.1%, RLC margin 16.9%), but consolidated optics are weighed by Smokey Bones conversion/closure drag and high interest expense .
• Near-term growth reset: 2025 openings cut to 3–4 due to construction delays; 2 conversions underway and more slated, preserving medium-term unit runway .
• Deleveraging path intact but timing slipped; execution on $75–$100M equity raise (75% to debt reduction) is a key stock catalyst over the next 12 months .
• Margin trajectory: manageable commodity inflation (low single digits) and labor efficiencies help, but sales deleverage remains a headwind until conversions ramp and closures annualize .
• Event-driven demand supports near-term comps (NBA/NHL playoffs, UFC/boxing, soccer), with March comps already positive; sustained activation should aid sequential stabilization .
• Watch items: pace of Smokey Bones closures/conversions, Twin Peaks new unit ramps, and interest expense burden; any clarity on 2025 EBITDA or margin targets could re-rate the story .
• With Street consensus unavailable, trading may be headline/narrative-driven near term; evidence of execution on units and equity/debt plan likely to be the primary valuation drivers .

Footnote: *Estimates sourced from S&P Global; consensus for TWNP was unavailable at time of analysis.