Nathan's Famous (NATH) Q4 Earnings Improve Y/Y, Gross Margin Up

Core Viewpoint - Nathan's Famous, Inc. reported solid financial results for the fiscal fourth quarter of 2024, with notable growth in revenues and earnings per share, although there were concerns regarding rising costs and margin contraction [3][4][13]. Financial Performance - Full-year EPS was $4.80, flat compared to the fiscal 2023 period [1]. - Nathan's Famous delivered EPS of 96 cents in the fourth quarter, reflecting a 20% increase year over year [3]. - Total revenues for the fiscal fourth quarter reached $28.9 million, up 5.8% from the previous year [4]. - Full-year revenues amounted to $138.6 million, indicating a 5.9% increase from fiscal 2023 [5]. Segment Performance - Revenues in the Product licensing segment totaled $7.5 million, up 1.6% year over year [2]. - The Branded product program reported revenues of $18.3 million, a 7.4% increase from the year-ago quarter [6]. - Restaurant operations segment revenues totaled $2.6 million, up 4.5% year over year [7]. - Robust performances across all segments contributed to the overall revenue growth [14]. Profitability Metrics - Gross profit increased by 6.6% to $12.2 million, with gross margin expanding by 34 basis points to 42.2% [8]. - Adjusted EBITDA for the fourth quarter amounted to $7.3 million, up 2.6% year over year [10]. - Adjusted operating profit totaled $7 million, reflecting a 4.9% increase from the prior year, although the adjusted operating margin contracted by 20 basis points to 24.3% [17]. Cost and Expense Analysis - Selling, general and administrative expenses rose by 5.4% year over year to $4.7 million, with advertising expenses increasing significantly by 61.3% to $0.5 million [9]. - Adjusted operating costs totaled $5.2 million, indicating a 9% increase from the year-ago quarter [9]. Liquidity and Debt Management - At the end of fiscal 2024, the company had cash of $21 million, down from $29.9 million at the end of fiscal 2023 [11]. - Total long-term debt decreased to $59.6 million from $79.1 million at the end of fiscal 2023 [11]. Operational Highlights - The volume of hot dogs sold during the fiscal year was encouraging, and the company opened 17 new franchised locations [13]. - Cumulative net cash provided by operating activities at the end of fiscal 2024 was $20 million, slightly up from $19.8 million a year ago [19]. - The company exited the fourth quarter with solid top-line and bottom-line results, supported by robust segment performances [20].