Core Insights - Nathan's Famous, Inc. (NATH) shares have increased by 3.2% following the earnings report for the quarter ended December 29, 2024, outperforming the S&P 500 Index, which declined by 0.7% during the same period [1] - The stock has gained 11.3% over the past month, significantly exceeding the S&P 500's 3.2% rise [1] Financial Performance - Total revenues for the third quarter of fiscal 2025 reached $31.5 million, a 9.1% increase from $28.9 million in the same quarter last year [2] - Income from operations rose by 31.4% to $6.8 million from $5.1 million, while net income increased by 71.9% to $4.5 million from $2.6 million [2] - Diluted earnings per share (EPS) improved to $1.10, reflecting a 71.9% increase from $0.64 in the prior-year quarter [2] - For the first nine months of fiscal 2025, revenues totaled $117.4 million, up 7.1% from $109.6 million in the prior-year period [3] - Net income for this period grew by 26% to $19.8 million from $15.7 million, with diluted EPS increasing to $4.84 from $3.84, representing a 26% rise [3] Segmental Performance - Branded Product Program revenues increased by 7.2% to $21.1 million from $19.7 million in the prior-year quarter, with a 1.5% increase in hot dog sales volume and a 3.5% rise in average selling price [4] - Product Licensing revenues climbed by 16.9% to $7.1 million from $6.1 million, with year-to-date revenues growing 13.2% to $29.5 million from $26.1 million [5] - Restaurant Operations revenues improved by 6.8% to $2.8 million from $2.6 million, with year-to-date sales growing 5.5% to $14.6 million from $13.8 million [5] - Advertising Fund Revenue increased by 2.4% to $0.52 million from $0.51 million in the prior-year quarter, with year-to-date revenues growing 0.5% to $1.51 million from $1.50 million [6] Key Business Metrics - Adjusted EBITDA for the quarter was $7.5 million, a 30% increase from $5.8 million in the prior-year quarter [7] - For the nine-month period, adjusted EBITDA rose by 16.5% to $32.1 million from $27.6 million [7] Management Commentary - Management attributed the strong quarterly performance to strategic pricing actions, improved licensing revenues, and operational efficiencies [8] - Revenue growth in the Branded Product segment was supported by higher volumes and prices, despite increased beef costs [8] - Strong consumer demand contributed to revenue growth in both product licensing and restaurant operations segments [8] Other Developments - Nathan's Famous opened 24 new franchised locations during the nine-month period, expanding its market presence [10] - The board of directors declared and paid three quarterly dividends totaling $6.13 million and announced a quarterly cash dividend of $0.50 per share, payable on February 28, 2025 [10]

Core Insights - The article discusses the expertise of a specialized equity analyst in the restaurant sector, focusing on various dining segments in the U.S. market [1] Company Analysis - The company, Goulart's Restaurant Stocks, is dedicated to analyzing restaurant stocks across multiple segments, including QSR, fast casual, casual dining, fine dining, and family dining [1] - Advanced analytical models and specialized valuation techniques are employed to provide detailed insights and actionable strategies for investors [1] Industry Engagement - The analyst actively participates in academic and journalistic initiatives, contributing to institutions that promote individual and economic freedom [1] - Previous contributions include columns on monetary policy, financial education, and financial modeling aimed at making these topics accessible to a broader audience [1]

Revenue and Sales Performance - Total revenues increased by approximately 9% to $31,519,000 for the thirteen weeks ended December 29, 2024, compared to $28,890,000 for the same period in 2023[114]. - Foodservice sales from the Branded Product Program increased by approximately 7% to $21,099,000 for the third quarter fiscal 2025, with average selling prices rising by approximately 6%[115]. - Total Company-owned restaurant sales increased by approximately 9% to $1,804,000 during the third quarter fiscal 2025, primarily driven by higher sales at Coney Island locations[116]. - License royalties increased by approximately 17% to $7,105,000 in Q3 fiscal 2025 compared to $6,078,000 in Q3 fiscal 2024[117]. - Franchise restaurant sales increased to $16,066,000 in Q3 fiscal 2025 from $15,635,000 in Q3 fiscal 2024, primarily due to higher sales at airport and casino locations[118]. - Total revenues increased by approximately 7% to $117,395,000 for the thirty-nine weeks ended December 29, 2024, compared to $109,619,000 for the same period in fiscal 2024[136]. - Comparable domestic franchise sales were $12,805,000 in Q3 fiscal 2025 compared to $12,377,000 in Q3 fiscal 2024[118]. Financial Metrics - EBITDA for the thirteen weeks ended December 29, 2024, was $7,136,000, compared to $5,395,000 for the same period in 2023[111]. - Adjusted EBITDA for the thirty-nine weeks ended December 29, 2024, was $32,110,000, compared to $27,561,000 for the same period in 2023[111]. - General and administrative expenses decreased by $759,000 or 18% to $3,450,000 in Q3 fiscal 2025 compared to $4,209,000 in Q3 fiscal 2024[126]. - Interest expense decreased to $842,000 in Q3 fiscal 2025 from $1,392,000 in Q3 fiscal 2024[128]. - Total franchise fee income was $94,000 in Q3 fiscal 2025 compared to $87,000 in Q3 fiscal 2024[119]. - Advertising fund revenue was $520,000 in Q3 fiscal 2025 compared to $508,000 in Q3 fiscal 2024[127]. - The effective income tax rate for Q3 fiscal 2025 was 26.0% compared to 30.2% in Q3 fiscal 2024[133]. Cost and Expenses - Cost of sales increased by approximately 10% to $19,571,000 in Q3 fiscal 2025 compared to $17,872,000 in Q3 fiscal 2024[122]. - Cost of sales in the Branded Product Program increased by 6% to $64,626,000 in fiscal 2025 from $60,698,000 in fiscal 2024, driven by a 1.5% increase in hot dog sales volume and a 4% rise in average cost per pound[147]. - Company-owned restaurant sales cost was $6,215,000 or 55% of sales in fiscal 2025, down from $6,045,000 or 58% in fiscal 2024, with food and paper costs decreasing from 28% to 25%[147]. - General and administrative expenses decreased by 7% to $10,677,000 in fiscal 2025 from $11,496,000 in fiscal 2024, mainly due to lower professional and consulting fees[150]. - Interest expense in fiscal 2025 was $3,343,000 compared to $4,219,000 in fiscal 2024, reflecting a reduction in debt costs[152]. Cash Flow and Capital Management - Cash and cash equivalents increased by $2,684,000 to $23,711,000 at December 29, 2024, compared to $21,027,000 at March 31, 2024[161]. - Net cash provided by operating activities was $18,450,000 in fiscal 2025, up from $13,596,000 in fiscal 2024[166]. - The effective income tax rate decreased to 26.5% in fiscal 2025 from 27.7% in fiscal 2024, with income tax expense of $7,151,000 on pre-tax income of $26,942,000[157]. - The Company declared a fourth quarter dividend of $0.50 per share, payable on February 28, 2025, with total cash requirements for dividends in fiscal 2025 estimated at approximately $8,172,000[175][176]. - The Company has repurchased 1,101,884 shares at a cost of $39,000,000 under its stock repurchase plan, with 98,116 shares remaining to be repurchased[173]. - The Company entered into a five-year unsecured Credit Agreement providing for a term loan facility of $60,000,000 and a revolving credit facility of up to $10,000,000[171]. - The company expects to make cash interest payments of approximately $2,331,000 on Term Loan borrowings during the fiscal year ending March 30, 2025[178]. Market and Economic Conditions - Inflationary pressures negatively impacted earnings during the thirty-nine week period ended December 29, 2024, particularly within the Branded Product Program segment[104]. - The average cost of hot dogs during the fiscal 2025 period was approximately 4% higher than during the fiscal 2024 period, indicating inflationary pressures on commodity prices[184]. - A short-term increase or decrease of 10% in the cost of food and paper products would have increased or decreased the cost of sales by approximately $6,575,000 for the period ended December 29, 2024[195]. - Inflationary pressures on commodity prices, particularly for beef, have impacted the company's consolidated results of operations during the fiscal 2025 period[183]. - The company anticipates continued volatility in oil and gas prices affecting distribution costs and utility costs in Company-owned restaurants[194]. - The increase in minimum wage to $16.50 in New York City has created competitive pressure on labor rates, impacting financial results[185]. Strategic Focus and Future Outlook - The primary focus is to expand market penetration of the Nathan's Famous brand through increased distribution points across all business platforms[100]. - The Company does not expect to significantly increase the number of Company-owned restaurants but may invest in a small number of new units as showcase locations[101]. - The company has not attempted to hedge against fluctuations in commodity prices, exposing future purchases to market changes[195]. - The company made a voluntary principal prepayment of $8,000,000 of Term Loan borrowings under its Credit Agreement on October 10, 2024[179]. - A hypothetical 100 bps increase in the interest rate on outstanding unsecured Term Loan borrowings would lead to an increase of approximately $514,000 in cash interest costs over the next twelve months[192].

Financial Performance - Revenues for the third quarter fiscal 2025 were $31,519,000, an increase of 9% compared to $28,890,000 for the same period in fiscal 2024[4] - Net income for the third quarter fiscal 2025 was $4,484,000, up 72% from $2,607,000 in the third quarter of fiscal 2024[4] - Adjusted EBITDA for the third quarter fiscal 2025 was $7,479,000, representing a 30% increase from $5,751,000 in the prior year[4] Revenue Sources - License royalties increased to $29,517,000 for the thirty-nine weeks ended December 29, 2024, compared to $26,075,000 for the same period in fiscal 2024, a growth of 9%[5] - Sales from the Branded Product Program rose by $3,571,000 to $71,781,000 during the thirty-nine weeks ended December 29, 2024, reflecting a 5.2% increase year-over-year[5] - Company-owned restaurant sales were $11,351,000 for the thirty-nine weeks ended December 29, 2024, up from $10,512,000 in the same period of fiscal 2024[5] Pricing and Sales Volume - The average selling price of hot dogs increased by approximately 3.5% compared to the prior year period[5] - The volume of hot dogs sold increased by 1.5% during the fiscal 2025 period[5] Dividends and Franchise Fees - The Board of Directors declared a quarterly cash dividend of $0.50 per share, totaling $6,127,000 for the fiscal 2025 period[5] - Total franchise fee income, including cancellation fees, was $294,000 during the fiscal 2025 period, down from $325,000 in the prior year[5]

Core Viewpoint - Nathan's Famous, Inc. reported solid financial results for the second quarter of fiscal 2025, with increases in earnings per share and revenues, although some segments experienced declines in franchise fees and royalties [1][18]. Revenue Summary - Nathan's Famous registered revenues of $41.1 million in the fiscal second quarter, up 6.1% year over year [2]. - Revenues from the United States were $40.5 million, an increase of 8.1% year over year, while international revenues were $0.6 million, down 50.4% year over year [13]. Segment Performance - Branded Products revenues were $24.5 million, up 5.1% from the year-ago quarter, with a 4% increase in hot dog sales volume and a 1.4% increase in average selling prices [4]. - Company-owned restaurants generated $5.3 million, up 2.9% year over year, driven by higher sales at Coney Island locations [5]. - License royalties totaled $9.5 million, up 13.8% year over year, with royalties from hot dog sales increasing 14.5% to $8.6 million [6]. - Franchise fees and royalties generated $1.2 million, down 9.1% year over year, with total royalties at $1.1 million, down 7.1% [8]. - Virtual kitchen royalties were $11,000, down 38.9% year over year, and traditional franchise royalties were $807,000, down 5.9% [9]. Profitability Metrics - Operating profit totaled $9.6 million, an increase of 5.8% from the prior-year quarter, while net income was $6 million, up 5.6% [16]. - Adjusted EBITDA for the quarter was $10.4 million, up 5.9% year over year [16]. Cost and Margin Analysis - Gross profit was $3.9 million with a gross margin of 12.9%, down from $4.4 million and 15.3% in the prior year [14]. - Restaurant operating expenses increased 3.7% to $1.4 million, while general and administrative expenses rose 0.7% to $3.3 million [15]. Liquidity and Cash Flow - The company exited the second quarter with cash and cash equivalents of $31.2 million, up from $25.9 million at the end of the first quarter [16]. - Cumulative net cash provided by operating activities was $14.8 million, compared to $11.4 million a year ago [17].

Revenue and Sales Performance - Total revenues increased by approximately 6% to $41,109,000 for the thirteen weeks ended September 29, 2024, compared to $38,744,000 for the same period in 2023[115] - Foodservice sales from the Branded Product Program increased by approximately 5% to $24,536,000 for the second quarter fiscal 2025, with a 4% increase in the volume of hot dogs sold[116] - Total Company-owned restaurant sales increased by approximately 3% to $5,348,000 during the second quarter fiscal 2025, influenced by higher sales at Coney Island locations[117] - Total revenues increased by approximately 6% to $85,876,000 for the 26 weeks ended September 29, 2024, compared to $80,729,000 for the same period in fiscal 2024[137] - Foodservice sales from the Branded Product Program increased by approximately 4% to $50,682,000 for the fiscal 2025 period compared to $48,522,000 in fiscal 2024[138] - Comparable domestic franchise sales decreased to $29,037,000 in fiscal 2025 from $29,388,000 in fiscal 2024, primarily due to lower traffic at international locations[141] Financial Metrics - EBITDA for the thirteen weeks ended September 29, 2024, was $9,787,000, compared to $9,592,000 for the same period in 2023[112] - Adjusted EBITDA for the thirteen weeks ended September 29, 2024, was $10,350,000, compared to $9,774,000 for the same period in 2023[112] - Overall cost of sales increased by approximately 5% to $51,270,000 in the fiscal 2025 period compared to $48,871,000 in fiscal 2024, with gross profit at $8,959,000 or 15%[144] - The effective income tax rate for Q2 fiscal 2025 was 25.5%, down from 27.4% in Q2 fiscal 2024, reflecting income tax expense of $2,069,000 on $8,099,000 of pre-tax income[134] - The effective income tax rate for fiscal 2025 was 26.7%, compared to 27.2% in fiscal 2024, with income tax expense of $5,576,000 on pre-tax income of $20,883,000[153] Costs and Expenses - Cost of sales in the Branded Product Program increased by 5% to $46,290,000 in fiscal 2025 from $44,010,000 in fiscal 2024, driven by a 2% increase in hot dog sales volume and a 3% rise in average cost per pound[145] - Company-owned restaurant sales cost was $4,980,000 or 52% of sales in fiscal 2025, down from $4,861,000 or 55% in fiscal 2024, with food and paper costs decreasing from 27.8% to 24.8%[145] - Restaurant operating expenses rose to $2,518,000 in fiscal 2025 from $2,383,000 in fiscal 2024, with a decrease in the percentage of sales from 26.9% to 26.4%[146] - General and administrative expenses decreased by approximately $60,000 or 1% to $7,227,000 in fiscal 2025 compared to $7,287,000 in fiscal 2024[148] Cash Flow and Financing - Cash and cash equivalents increased by $10,180,000 to $31,207,000 at September 29, 2024, compared to $21,027,000 at March 31, 2024[157] - Net cash provided by operating activities was $14,826,000 in fiscal 2025, up from $11,366,000 in fiscal 2024[162] - The Company entered into a five-year unsecured Credit Agreement and borrowed $60,000,000 to refinance existing debt[103] - The Company entered into a five-year unsecured Credit Agreement providing for a term loan facility of $60,000,000 and a revolving credit facility of up to $10,000,000[166] - The company made a voluntary principal prepayment of $8,000,000 on Term Loan borrowings under its Credit Agreement on October 10, 2024[175] Dividends and Shareholder Returns - The Company declared a third quarter fiscal 2025 dividend of $0.50 per common share, payable on December 6, 2024[171] - The Company expects total cash requirements for dividends for fiscal 2025 to be approximately $8,169,000[172] Market and Economic Conditions - Inflationary pressures impacted operations, particularly with higher commodity prices for beef and beef trimmings, which may continue throughout fiscal year 2025[104] - The average cost of hot dogs during fiscal 2025 was approximately 3% higher than during fiscal 2024, indicating inflationary pressures on commodity prices[180] - A short-term increase or decrease of 10% in the cost of food and paper products would have increased or decreased the cost of sales by approximately $4,741,000 for the period ended September 29, 2024[191] - The company expects continued volatility in oil and gas prices affecting distribution costs and utility costs in Company-owned restaurants[190] - Competitive pressure on labor rates due to minimum wage increases in New York State has significantly impacted financial results[181] - The company anticipates that rising labor costs, commodity prices, and other operating expenses could adversely affect operations[184] Licensing and Royalties - The primary growth drivers have been the Licensing and Branded Product Programs, which are the largest contributors to the Company's revenues and profits[100] - License royalties increased by approximately 14% to $9,491,000 in Q2 fiscal 2025 compared to $8,339,000 in Q2 fiscal 2024, driven by an 18% increase in retail volume[118] - Franchise fees and royalties decreased by approximately 9% to $1,174,000 in Q2 fiscal 2025 from $1,291,000 in Q2 fiscal 2024, with traditional franchise royalties at $807,000 compared to $858,000[119] - Total franchise fee income was $200,000 in the fiscal 2025 period compared to $238,000 in fiscal 2024, with domestic franchise fee income increasing to $58,000 from $55,000[142] - The company recognized $23,000 in forfeited fees in the fiscal 2025 period, compared to $63,000 in fiscal 2024, with twenty-one franchise locations opened in fiscal 2025[143] - Advertising fund revenue, after eliminating company contributions, was $988,000 during the fiscal 2025 period compared to $993,000 in fiscal 2024[143] Debt and Interest Rate Exposure - A hypothetical 100 bps increase in the interest rate on outstanding unsecured Term Loan borrowings would lead to an increase of approximately $600,000 in cash interest costs over the next twelve months[188] - As of September 29, 2024, the company's cash and cash equivalents totaled $31,207,000, with earnings on this cash expected to fluctuate by approximately $78,000 per annum for each 0.25% change in interest rates[187] - The company has not hedged against fluctuations in commodity prices, leaving future purchases subject to market changes[191]

Financial Performance - Revenues for the second quarter fiscal 2025 were $41,109,000, an increase of 6.5% compared to $38,744,000 in the same period last year[2] - Net income for the second quarter fiscal 2025 was $6,030,000, up 5.6% from $5,711,000 in the prior year[2] - Adjusted EBITDA for the second quarter fiscal 2025 was $10,350,000, representing a 5.9% increase from $9,774,000 in the same quarter of the previous year[2] - Income from operations for the twenty-six weeks ended September 29, 2024, was $23,377,000, a 13.6% increase from $20,567,000 in the same period last year[3] - Total net income for the twenty-six weeks ended September 29, 2024, was $15,307,000, compared to $13,099,000 for the same period last year, representing a 16.8% increase[18] - Total adjusted EBITDA for the twenty-six weeks ended September 29, 2024, was $24,631,000, up from $21,810,000 in the prior year, indicating a 12.5% growth[18] Earnings and Dividends - Earnings per diluted share for the second quarter fiscal 2025 were $1.47, up from $1.40 in the same quarter of the previous year, a 5.0% increase[2] - The Board of Directors declared a quarterly cash dividend of $0.50 per share, totaling $4,085,000 for the fiscal 2025 period[9] Sales and Royalties - License royalties increased to $22,412,000 for the twenty-six weeks ended September 29, 2024, compared to $19,997,000 in the same period last year, a growth of 12.0%[5] - Sales from the Branded Product Program rose by $2,160,000 to $50,682,000 during the twenty-six weeks ended September 29, 2024, reflecting a 4.5% increase from $48,522,000 in the prior year[6] - Franchise restaurant sales decreased slightly to $36,334,000 during the fiscal 2025 period, compared to $36,433,000 in the prior year, a decline of 0.3%[8] Expenses and Taxation - Interest expense for the thirteen weeks ended September 29, 2024, was $1,441,000, slightly higher than $1,413,000 in the same period last year[18] - Provision for income taxes for the thirteen weeks ended September 29, 2024, was $2,069,000, down from $2,153,000 year-over-year, showing a decrease of 3.9%[18] - Depreciation and amortization expenses decreased to $247,000 for the thirteen weeks ended September 29, 2024, from $315,000 in the same period last year, a reduction of 21.6%[18] Other Financial Metrics - The average selling price of hot dogs increased by approximately 2.5% compared to the prior year period, while the volume sold increased by 2%[6] - EBITDA for the thirteen weeks ended September 29, 2024, was $9,787,000, up from $9,592,000 year-over-year, indicating a 2.0% growth[18] - Adjusted EBITDA for the thirteen weeks ended September 29, 2024, reached $10,350,000, compared to $9,774,000 in the prior year, reflecting a 5.9% increase[18] - Loss on debt extinguishment was recorded at $334,000 for the thirteen weeks ended September 29, 2024, with no loss reported in the same period last year[18] - Share-based compensation increased to $229,000 for the thirteen weeks ended September 29, 2024, compared to $182,000 in the prior year, marking a 25.8% rise[18]

JERICHO, N.Y., Nov. 07, 2024 (GLOBE NEWSWIRE) -- Nathan's Famous, Inc. (“Nathan’s”, the “Company”, “we”, “us” or “our”) (NASDAQ:NATH) today reported results for its second fiscal quarter ended September 29, 2024. For the thirteen-week period ended September 29, 2024 (“second quarter fiscal 2025”): Revenues were $41,109,000 as compared to $38,744,000 during the thirteen weeks ended September 24, 2023;Income from operations was $9,632,000 as compared to $9,104,000 during the thirteen weeks ended September 24, ...

Nathan's Famous, Inc. (NATH) reported earnings per share (EPS) of $2.27 in the first quarter of fiscal 2025, which increased 25.4% from the year-ago EPS of $1.81. Revenues in Detail Nathan's Famous registered revenues of $44.8 million in the fiscal first quarter, up 6.6% year over year. Lower revenues from the majority of its segments drove the topline. Segment Details Nathan's Famous derives revenues from five segments — Branded Products, Company-owned restaurants, License royalties, Franchise fees and roy ...

OkiMdp Overview Below, I will discuss each segment of Nathan's. Note that the percentage of sales and year-over-year growth are as of March 2024 based on FactSet data. 8 Ct Beef Hot Dogs at Food Lion margins decline to 32.3% by 2030 and using a 9% WACC and a -3% growth rate, I arrived at $64.23 (less than 8% downside). Nathan's Famous (NASDAQ:NATH) is significantly underfollowed and undervalued, allowing investors the opportunity to invest in a leading premium hot dog brand with substantial upside (over 50% ...