Nathan's Famous Reports 9% Revenue Growth to $34.3 Million in Third Quarter

Nathan's Famous, Inc. reported its financial results for the thirteen and thirty-nine weeks ended December 28, 2025, revealing a total revenue increase of approximately 9% to $34.3 million for the third quarter, compared to $31.5 million in the same period last year. For the thirty-nine weeks, revenues rose by 8% to $127.0 million from $117.4 million. The growth was primarily driven by a 13% increase in foodservice sales from the Branded Product Program, which reached $23.7 million, despite a 3% decline in the volume of hot dogs sold. The average selling price increased by 16%, reflecting rising commodity costs, particularly in beef.

In terms of profitability, Nathan's reported a net income of $3.1 million for the third quarter, down from $4.5 million in the prior year, resulting in a diluted earnings per share of $0.75 compared to $1.10. For the thirty-nine weeks, net income was $17.2 million, down from $19.8 million, with diluted earnings per share at $4.17, compared to $4.84. The decline in net income was attributed to increased costs of sales, which rose by 18% to $23.1 million in the third quarter, driven by higher commodity prices and inflationary pressures.

Operationally, Nathan's Famous experienced a decrease in customer traffic at its company-owned restaurants, leading to a 9% decline in sales to $1.6 million for the third quarter. The total number of franchised locations decreased to 225 from 236 year-over-year, with four new franchise locations opening and six closing during the quarter. The company also reported a 4% increase in license royalties, totaling $7.4 million, attributed to higher selling prices despite a decrease in retail volume.

Strategically, Nathan's is navigating inflationary pressures and rising labor costs, particularly in New York, where minimum wage increases have impacted operational expenses. The company has entered into a merger agreement with Smithfield Foods, Inc., which is expected to close in 2026, allowing Nathan's to continue its focus on expanding its brand and product distribution. The merger is subject to regulatory approvals and stockholder consent, and Nathan's has committed to maintaining its operations in the ordinary course until the merger is finalized.

Looking ahead, Nathan's management anticipates continued inflationary pressures on commodity prices and labor costs, which may affect future profitability. The company plans to manage these challenges through price adjustments and operational efficiencies while maintaining a focus on its core business strategies and the successful integration of the merger with Smithfield Foods.