Twin Hospitality Group Inc. (TWNP)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 revenue declined 4.1% year over year to $87.8M, with a larger GAAP net loss of $20.8M; Adjusted EBITDA was $5.2M as non‑cash stock‑based compensation drove a sharp G&A increase and operating loss .
• Twin Peaks revenue grew 5.8% to $51.1M despite a 4.4% same‑store sales decline; Smokey Bones revenue fell 15.2% as conversions and closures continued; consolidated restaurant‑level contribution margin fell 160 bps YoY to 11.8% .
• Management attributed softness to unfavorable sports calendaring and ongoing Smokey Bones conversions; it expects low single‑digit commodity inflation and a stronger sports calendar to support 2H traffic, with G&A normalizing after Q2 equity comp .
• Structural actions and capital plans remain key stock catalysts: accelerating Smokey Bones conversions to Twin Peaks, a robust 100‑unit franchise pipeline, and an equity raise plan ($75–$100M over the next 12 months; 75% to debt reduction), while DOJ dismissal of FAT Brands charges removes a headline risk overhang .

What Went Well and What Went Wrong

• What Went Well
  • Twin Peaks brand revenue +5.8% YoY to $51.1M on new lodge openings; Twin Peaks RLC margin held relatively resilient at 17.7% (down 30 bps YoY) despite SSS pressure .
  • Development pipeline intact: ~100 committed lodges with ~75% from existing franchise partners; conversions are delivering significantly higher volumes than as Smokey Bones .
  • Cost visibility: commodity inflation in low single digits expected through 2025; selective pricing and efficiencies helping offset inflationary pressures .
  • CEO tone on operational reset and simplification: “six clear priorities… focusing on the fundamentals… reducing complexity… sharpening cost discipline… streamlining menu… measured pricing… positioning the company to continue growth” -.
• What Went Wrong
  • Same‑store sales and traffic weakness: Twin Peaks SSS −4.4%, citing less favorable sports calendar (NBA/NHL playoffs lacking key market teams; limited lift from soccer timing) .
  • Smokey Bones drag: revenue −15.2% YoY to $36.7M and RLC margin down to 4.9% (−410 bps YoY) as temporary closures and conversions continue; further pressure expected during conversion ramp -.
  • GAAP profitability deteriorated: operating loss of $11.6M and net loss of $20.8M, with G&A spiking to $19.9M on non‑cash equity grants tied to the public listing; Adjusted EBITDA fell to $5.2M .

Financial Results

Consolidated snapshot (oldest → newest)

• Values with * retrieved from S&P Global (GetFinancials).

Segment mix and revenue detail

Key KPIs

Context and variance vs prior periods and YoY

• Revenue: $87.8M, −4.1% YoY (vs $91.6M) and +0.8% QoQ (vs $87.1M). Drivers: Smokey Bones closures and conversions, lower SSS; partial offset from new Twin Peaks lodges .
• Profitability: Operating loss worsened to $(11.6)M and net loss to $(20.8)M; Adjusted EBITDA declined to $5.2M as G&A rose to $19.9M on equity grants related to the listing .
• Brand performance: Twin Peaks revenue rose 5.8% despite SSS declines; Smokey Bones revenue −15.2% as conversion program accelerated -.

Estimates comparison (S&P Global)

• Consensus estimates for EPS and revenue were not available for TWNP; actuals shown from company filings (we found no S&P Global consensus values for Q2 2025). Values retrieved from S&P Global where noted; otherwise, company-reported actuals cited above .

Guidance Changes

No formal revenue/EPS margin guidance ranges were provided; management focused on operational priorities and conversion cadence -.

Earnings Call Themes & Trends

Management Commentary

• Strategic focus and operational reset: “We are acting with urgency around six clear priorities: focusing on the fundamentals… reducing complexity… sharpening cost discipline… streamlining and strengthening our menu… measured… pricing… positioning the company to continue growth.” — Kim Boerema, CEO .
• Brand strength and pipeline: “Our robust pipeline of 100 committed lodges provides clear visibility to growth, with 75% coming from existing franchise partners.” — Kim Boerema .
• Q2 softness drivers: “Softer sales and traffic, primarily due to less favorable sports calendaring… NBA and NHL playoffs lacked key market teams… soccer… scheduled during off‑peak hours.” — Ken Kuick, CFO .
• G&A normalization: “The majority of that $12.5 million [G&A increase] was equity grants… That expense will go down significantly going forward.” — Ken Kuick .
• Conversions pace: “Of the 60 Smokey Bones restaurants, half… will be converted into Twin Peaks… over the next 12 months… most of the conversions completed or underway.” — Ken Kuick .
• External overhang reduced: “The US Department of Justice has dropped all charges against FAT Brands… and all other defendants.” — Ken Kuick .

Q&A Highlights

• Conversion cadence and closures: Plan to convert ~30 Smokey Bones (10 company/20 franchise) with most completed or underway within 12 months; nine underperformers to close by year‑end, additional closures assessed as needed .
• G&A: Q2 spike driven by ~$12.5M equity grants post‑listing; management expects significantly lower run‑rate ahead and is consolidating Smokey Bones/Twin Peaks G&A by year‑end .
• Margin outlook: Twin Peaks RLC ~17.7% with room to improve via cost discipline and menu simplification; Smokey Bones margins pressured during conversions -.
• Development: Fayetteville, NC franchise conversion by year‑end; additional company‑owned conversions in early 2026; pipeline of 100 lodges reiterated .
• Capital plan: Equity raise $75–$100M over next 12 months, 75% to debt pay‑down; initial tranche delayed by market volatility/CEO search .

Estimates Context

• We found no S&P Global consensus estimates for EPS or revenue for Q2 2025; comparisons to “consensus” are therefore unavailable for this quarter. Company‑reported actuals are shown above .
• Implications: In the absence of consensus anchors, buy‑side will likely key off sequential trend (revenue flat QoQ; Adjusted EBITDA +$0.1M QoQ) and qualitative catalysts (sports calendar tailwind, G&A normalization, conversions) rather than a beat/miss narrative -.

Key Takeaways for Investors

• Twin Peaks remains the growth engine: brand revenue rose 5.8% despite SSS declines; conversions deliver materially higher volumes than Smokey Bones — expect mix shift to support medium‑term margin and cash flow .
• Near‑term comp risk persists: sports calendar headwinds and conversion disruptions weighed on Q2; management is leaning into football season programming and localized events to re‑accelerate traffic .
• Margin normalization lever: Q2 G&A spike from equity grants is non‑recurring; management signaled a “significantly” lower run‑rate and G&A consolidation by year‑end .
• Conversion execution is the swing factor: plan to have most of the 30 targeted Smokey Bones conversions completed/underway within 12 months — key to improving brand mix and margins .
• Capital overhang manageable but present: equity raise of $75–$100M over next 12 months (75% to debt) remains planned; timing sensitive to market conditions and may influence near‑term multiple .
• Operating playbook re‑set: CEO’s six priorities (operations, simplification, cost discipline, menu streamlining, measured pricing, efficient growth) should improve execution into 2H and 2026 .
• Sentiment catalyst: DOJ dismissal of FAT Brands case removes a headline risk; combined with sports seasonality and conversion progress, set‑up into 2H appears more constructive .

Notes:

• EPS values marked with * were retrieved from S&P Global.
• All other financial and operating data are from company filings and earnings calls as cited.

Sources: Q2 2025 press release and 8‑K -; Q2 2025 earnings call - -; Q1 2025 press release and call - -; Q4 2024 press release and call - -; CEO appointment 8‑K .