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Fogo-de-Chao-IPO-Registration-Ron-Ruggless-Photo.jpg Ron Ruggless
The parent to Fogo de Chão, which has this restaurant at its headquarters in Plano, Texas, on Thursday filed an IPO registration, setting its eyes on a return to the public markets.

Fogo de Chão parent files IPO registration

60-unit Brazil-inspired churrascaria brand has eye on public markets again.

Fogo Hospitality Inc., the parent to the 60-unit Fogo de Chão churrascaria fine-dining brand, registered Thursday for a return to the public markets, filing a form S-1 with the Securities and Exchange Commission.

The Plano, Texas-based brand said the number of shares to be offered in the proposed IPO and the price range had not yet been determined. Four restaurant companies from Krispy Kreme to Portillo’s have launched IPOs this year, and the market awaits debuts by Sweetgreen and Panera Brands.

In its S-1 SEC filing, Fogo said it had $362 million in annualized revenue and an average annual unit volume of $7.9 million, based on the 39-week period ended Oct. 3.

The company has 46 restaurants in 21 states, the District of Columbia and Puerto Rico and 14 units internationally (seven company-owned in Brazil and seven franchised in Mexico and the Middle East).

Fogo Hospitality was incorporated under the name Prime Cut Parent Holdings Inc. in February 2018 in connection with acquisition by the affiliates of Rhône Group L.L.C. April 5, 2018, in a $560 million cash deal.

Prior to Rhône’s acquisition, Fogo had been publicly traded since June 2015.

“In recent years, we innovated differentiated, new revenue platforms to drive frequency across guest need states, including weekday lunch, dinner, weekend Brazilian brunch and group dining, plus Bar Fogo, full-service catering and takeout and delivery options,” the company said in its SEC filing. “Whether our guests opt for our Picanha Burger starting at $8 or our signature, The Full Churrasco Experience, where guests can sample a wide range of meat options and our Market Table starting at $54.95, our platforms provide our guests with an exceptional value compared to other restaurant concepts.”

Fogo noted that it had expanded the possible dining options, including small gatherings, family get-togethers, business functions, convention banquets and other celebrations.

“Our revenue platform expansion has effectively generated new trial and increased frequency as evidenced by our six-year track record of consecutive year-over-year traffic growth through fiscal 2019,” the brand said in its IPO registration. “This trend has resumed in fiscal 2021 following the impact of the COVID-19 pandemic in fiscal 2020.”

For the 39 weeks ended Oct. 3, Fogo de Chao said it swung to a profit of $33.1 million from a loss of $35.1 million in the same period of 2020. For the full fiscal 2021 year ended Jan. 3, the loss was $48.4 million compared to a 2019 profit of $34.1 million.

Fogo’s revenue in the 39 weeks ended Oct. 3 was $295.6 million, up from $138 million in the same period of 2020. Total revenue for the 2020 fiscal year ended Jan. 3 was $204.8 million compared to 2019 fiscal year income of $349.9 million.

The company said that in 2022 it planned to open eight to 10 company-owned restaurant sand one to two franchised units.

“Beyond 2022, we plan to maintain company-owned unit growth of at least 15% annually while continuing to expand internationally with our franchise model,” the company noted.

Morgan Stanley, BofA Securities and Jefferies LLC are acting as lead book-running managers for the offering. Credit Suisse and Piper Sandler & Co. are also acting as lead book-running managers. Raymond James, Stephens Inc., and Truist Securities are acting as book-running managers for the proposed offering.

Panera Brands on Nov. 9 said it would return to the public markets through a special purpose acquisition company. Sweetgreen has priced its IPO at $23 to $25 a share and that is expected to start trading as early as Thursday. Earlier in the year, Dutch Bros., First Watch, Krispy Kreme and Portillo’s completed their IPOs.

Fogo de Chão was founded in Brazil in 1979, and the brand opened its first U.S. location in Dallas in 1997.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

TAGS: Finance
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