Shares of Nathan's Famous, Inc. (NATH Quick QuoteNATH - Free Report) have gained 3.7% since the company reported its earnings for the quarter ended March 30, 2025. This compares favorably to the S&P 500 Index’s 0.5% rise over the same period. Over the past month, NATH’s stock has risen 11.9%, significantly outpacing the S&P 500’s 2.6% increase.

Nathan's Famous’ Revenue and Earnings Performance

For the fiscal year ended March 30, 2025, Nathan’s Famous reported revenues of $148.2 million, representing a 6.9% increase from $138.6 million in fiscal 2024. Net income rose 22.5% to $24 million from $19.6 million in the prior year. Earnings per diluted share (EPS) grew 22.3% to $5.87 from $4.80 a year ago. NATH’s adjusted EBITDA improved 12.5% to $39.2 million from $34.8 million in fiscal 2024. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

For the fourth quarter of fiscal 2025, revenue grew 6.2% to $30.8 million from $28.9 million, despite the quarter being one week shorter than the year-ago period. Net income for the quarter was $4.2 million, an 8.3% year-over-year increase from $3.9 million, while diluted EPS improved 7.3% to $1.03 from $0.96. NATH’s adjusted EBITDA declined 2.6% to $7.1 million from $7.3 million in the year-ago period.

NATH’s 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, which is partially correlated to beef markets. However, segment income from operations dropped 13.9% to $7.1 million from $8.3 million due to a 7% rise in beef and beef trimmings costs.

Branded Product Program revenues were $20 million in fourth-quarter fiscal 2025, up 9.7% from the year-ago quarter’s $18.3 million.

Product Licensing revenue grew 11.4% to $37.4 million from $33.6 million, with Smithfield Foods contributing the bulk — $33.6 million, up 11.7% from last year’s $30.1 million. Segment income from operations surged 11.5% to $37.2 million from $33.4 million, making licensing the most profitable segment.

Product Licensing revenues were $7.9 million in fourth-quarter fiscal 2025, up 5.3% from the year-ago quarter’s $7.5 million.

Restaurant Operations revenue saw a 2.4% increase to $16.9 million from $16.5 million. Despite inflationary pressures, the segment's income from operations rose 46.4% to $2.4 million from $1.7 million, supported by stronger performance at the Coney Island locations.

Restaurant Operations revenues were $2.3 million in fourth-quarter fiscal 2025, down 13.4% from the year-ago quarter’s $2.6 million.

Nathan's Famous’ Other Key Business Metrics

Franchise Operations posted revenues of $4.1 million in fiscal 2025, down 4.8% from $4.4 million a year earlier. The company opened 25 new franchised locations but also saw the same number close, indicating a net neutral expansion. Total royalties were nearly flat in fiscal 2025, reflecting stable franchise performance.

The advertising fund revenue remained stable at around $2.07 million in fiscal 2025 compared with $2.08 million in fiscal 2024. This indicates consistent contributions from franchisees and partners, supporting brand visibility and customer outreach efforts.

NATH’s 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. Despite ongoing beef cost inflation, strategic pricing and disciplined cost control helped mitigate the impact. The Coney Island location, which serves as both a flagship and a marketing beacon, remained a focal point for brand engagement.

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, payable on July 1 to shareholders of record as of June 23, 2025 — a move signaling continued confidence in the company's cash flow and future earnings stability.

Factors Influencing Nathan's Famous’ Results

Nathan’s Famous faced headwinds in commodity costs, especially from beef and related inputs. Beef prices rose 7% in fiscal 2025 on top of a 10% hike the year before. These increases directly pressured the Branded Product Program’s margins. Despite these cost challenges, NATH’s pricing strategy helped offset some of the inflationary impact.

Labor inflation also persisted, notably in New York, where the minimum wage rose from $16.00 to $16.50 per hour as of Jan. 1, 2025. Nathan’s Famous responded by focusing on operational efficiencies and cost controls across its company-owned restaurants.

NATH’s Guidance

Nathan’s Famous did not provide formal financial guidance for fiscal 2026. However, it expressed confidence in continued growth across its licensing and branded product channels. Management pointed to ongoing expansion efforts, product development initiatives and international market penetration — especially in partnership with Smithfield Foods and Lamb Weston — as key growth drivers.

Nathan's Famous’ Other Developments

No significant acquisitions, divestitures or restructuring activities were reported during the quarter. However, Nathan’s Famous reaffirmed its long-term manufacturing and distribution agreements, including the pivotal licensing partnership with Smithfield Foods, which is contracted through March 2032.