Fogo de Chao in rare form ahead of planned IPO

With double-digit AUVs and strong traffic growth, the Brazilian steakhouse chain is building momentum as it prepares to return to Wall Street.
Fogo de Chao exterior
Fogo de Chao reported AUVs of $10.1 million for the 12 months ending in September. / Photo courtesy of Fogo de Chao

By all accounts, Brazilian steakhouse chain Fogo de Chao was doing quite well last November when it filed paperwork to go public.

One year later, the chain known for skewered meats carved tableside appears to be doing even better. 

The Plano, Texas-based chain in November updated its federal filing documents with results from a bountiful 2022. Here’s a look at the top-line highlights:

  • Total revenue increased nearly 43% year over year, to $517 million, for the 12 months ending in Q3 2022.
  • Average unit volumes expanded to $10.1 million, from $7.9 million a year ago.
  • Traffic increased 12.3%, marking the chain’s seventh straight year of transaction growth, excluding 2020.
  • Same-store sales rose 16.4%.

The chain also opened six new corporate restaurants and one international franchised location, with four more slated for Q4. The new stores, located in a variety of markets, were performing beyond Fogo’s expectations, according to the filing, adding to its confidence that it can eventually have at least 300 U.S. restaurants—nearly 6 times its current footprint of 53. 

And with average unit volumes entering double-digits, the chain finds itself in rare air among full-service chains. Just two casual-dining brands—Carmine’s and The Cheesecake Factory—had AUVs higher than $10 million last year, according to data from Restaurant Business sister company Technomic. 

Fogo’s profits, though down slightly from 2021, remained near or above 2019 figures. Operating margin was 10.6%, down from 11.2%, and restaurant-contribution margin was 26.7%, down from 28.8%. 

The chain has yet to announce the timing of its IPO. A representative had not responded to a question about its plans by publication time.

Founded in Brazil in 1979 and brought stateside in 1997, Fogo de Chao serves grilled, seasoned meats cooked churrasco-style on skewers and then carved at the table by the chefs, known as gauchos. Customers can try up to 16 different meats in an all-you-can eat format for a fixed price starting at $54.95. This year, it revamped its bar menu to appeal to customers looking for lighter fare. 

Fogo went public once before, in 2015, but struggled to win over investors. It was sold to private-equity group Rhone Capital for $560 million in 2018.

It will look to return to Wall Street amid a strong period for steakhouse concepts, which have benefited from the release of pent-up demand coming out of the pandemic. 

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