Nathan's(NATH) ZACKS·2025-06-13 17:35Core Viewpoint - Nathan's Famous, Inc. has demonstrated strong financial performance for fiscal year 2025, with significant increases in revenue and net income, leading to a positive stock performance compared to the S&P 500 index [1][2]. Financial Performance - For the fiscal year ended March 30, 2025, Nathan's Famous reported revenues of $148.2 million, a 6.9% increase from $138.6 million in fiscal 2024 [2]. - Net income rose 22.5% to $24 million from $19.6 million in the prior year [2]. - Earnings per diluted share (EPS) grew 22.3% to $5.87 from $4.80 a year ago [2]. - Adjusted EBITDA improved 12.5% to $39.2 million from $34.8 million in fiscal 2024 [2]. - For the fourth quarter of fiscal 2025, revenue grew 6.2% to $30.8 million from $28.9 million [2]. - Net income for the quarter was $4.2 million, an 8.3% year-over-year increase from $3.9 million [2]. Segment Performance - Branded Product Program revenues climbed 6.2% to $91.8 million in fiscal 2025 from $86.5 million in fiscal 2024, driven by a 1.2% increase in volume of hot dogs sold and a 5% increase in average selling price [3]. - Product Licensing revenue grew 11.4% to $37.4 million from $33.6 million, with Smithfield Foods contributing significantly [4]. - Restaurant Operations revenue saw a 2.4% increase to $16.9 million from $16.5 million, with segment income from operations rising 46.4% to $2.4 million from $1.7 million [5]. Key Business Metrics - Franchise Operations posted revenues of $4.1 million in fiscal 2025, down 4.8% from $4.4 million a year earlier [7]. - Advertising fund revenue remained stable at around $2.07 million in fiscal 2025 compared with $2.08 million in fiscal 2024 [8]. Management Commentary - Management emphasized the strength of its multi-channel business model, particularly the stable, high-margin licensing streams and the adaptability of the Branded Product Program [9]. - Strategic pricing and disciplined cost control helped mitigate the impact of ongoing beef cost inflation [10]. Dividend Declaration - In light of strong fiscal 2025 performance, Nathan's Famous' board of directors declared a quarterly dividend of $0.50 per share effective June 10, 2025, signaling continued confidence in the company's cash flow and future earnings stability [11]. Influencing Factors - Nathan's Famous faced headwinds in commodity costs, especially from beef, with prices rising 7% in fiscal 2025 [12]. - Labor inflation persisted, notably in New York, where the minimum wage rose from $16.00 to $16.50 per hour as of January 1, 2025 [13]. Future Outlook - Nathan's Famous did not provide formal financial guidance for fiscal 2026 but expressed confidence in continued growth across its licensing and branded product channels [14]. - The company reaffirmed its long-term manufacturing and distribution agreements, including the pivotal licensing partnership with Smithfield Foods, contracted through March 2032 [15].