Nathan's Famous Reports 9% Revenue Growth to $31.5 Million for Quarter Ended December 29, 2024

Nathan's Famous, Inc. reported a notable increase in financial performance for the thirteen weeks ended December 29, 2024, with total revenues reaching $31.5 million, a 9% rise from $28.9 million in the same period last year. The company's net income also saw significant growth, climbing to $4.5 million, compared to $2.6 million in the prior year, resulting in a basic net income per share of $1.10, up from $0.64. For the thirty-nine weeks ended December 29, 2024, total revenues increased by 7% to $117.4 million, while net income rose to $19.8 million from $15.7 million in the previous year.

The company's branded products segment was a key driver of this growth, with sales increasing by 7% to $21.1 million for the quarter, attributed to a 6% rise in average selling prices. Additionally, license royalties surged by 17% to $7.1 million, reflecting a 19% increase in retail volume, although partially offset by a decrease in net selling price. Franchise fees and royalties remained stable, totaling $991,000 for the quarter, while company-owned restaurant sales also increased by 9% to $1.8 million, primarily due to higher sales at Coney Island locations.

Operationally, Nathan's Famous maintained a steady restaurant system, with 240 locations as of December 29, 2024, including 128 Branded Menu Program locations. The company reported a slight decrease in the number of franchised locations, from 238 to 236, with three new franchise locations opening and ten closing during the quarter. The company’s cash and cash equivalents increased to $23.7 million, up from $21.0 million at the end of the previous fiscal year, contributing to a net working capital increase to $26.5 million.

Strategically, Nathan's Famous completed a refinancing of its debt, entering into a five-year unsecured Credit Agreement on July 10, 2024, which included a $60 million term loan to redeem its 2025 Senior Secured Notes. This move is expected to enhance the company's liquidity and financial flexibility. The company also made a voluntary prepayment of $8 million on its term loan in October 2024, reflecting a proactive approach to managing its debt obligations.

Looking ahead, Nathan's Famous anticipates continued challenges from inflationary pressures, particularly in commodity prices for beef and labor costs, which could impact margins. The company plans to adapt by implementing price increases and exploring purchase commitments to mitigate rising costs. Management remains optimistic about leveraging its brand and expanding market penetration through its various business platforms, including the Branded Product Program and Licensing Program, to drive future growth.