Nathan's(NATH) ZACKS·2025-02-10 18:26Core 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]