Nathan's Famous Reports 9% Revenue Growth to $162.1 Million, Announces Merger with Smithfield Foods

Nathan's Famous, Inc. reported a revenue increase of approximately 9% for the fiscal year ending March 29, 2026, totaling $162.1 million, compared to $148.2 million in the previous fiscal year. The growth was primarily driven by a 15% rise in foodservice sales from the Branded Product Program, which reached $105.8 million, despite a slight decline in total sales from Company-owned restaurants, which fell to $12.5 million. The company attributed the decrease in restaurant sales to a 2% decline in customer traffic, largely due to unfavorable weather conditions impacting its Coney Island locations during peak summer months.

In terms of profitability, Nathan's reported a net income of $20 million for fiscal 2026, down from $24 million in fiscal 2025. The decrease in net income was influenced by rising costs, particularly in the Branded Product Program, where the average cost of hot dogs increased by approximately 19% due to inflationary pressures and supply chain challenges. The company's gross profit margin also declined, with gross profit at $11.8 million, or 10% of sales, compared to 14% in the prior year.

Strategically, Nathan's announced a merger agreement with Smithfield Foods, Inc. on January 20, 2026, which is expected to close in the second half of 2026, pending regulatory approvals and stockholder consent. This merger is anticipated to enhance Nathan's distribution capabilities and market presence, leveraging Smithfield's extensive resources. The company also continues to focus on expanding its Branded Product Program and Branded Menu Program, which have been significant contributors to revenue growth.

Operationally, Nathan's franchise system consisted of 221 locations across 19 states and 11 countries as of March 29, 2026. The company opened 23 new franchised locations during the fiscal year but closed 32, reflecting ongoing challenges in the competitive quick-service restaurant market. The average check at Company-owned restaurants increased by 1.3%, indicating some resilience in customer spending despite the overall decline in traffic.

Looking ahead, Nathan's management anticipates continued inflationary pressures on commodity prices, particularly beef, which may impact future profitability. The company plans to manage these challenges through price adjustments and operational efficiencies. Additionally, the successful completion of the merger with Smithfield Foods is expected to provide further growth opportunities and enhance Nathan's competitive position in the market.