Nathan's Revenue Up 8%, But Net Income Dips 7.7%

TL;DR

**Nathan's is selling more hot dogs, but making less money per dog – watch those margins!**

AI Summary

Nathan's Famous, Inc. reported a mixed financial performance for the twenty-six weeks ended September 28, 2025. Total revenues increased by 8% to $92.685 million from $85.876 million in the prior year, primarily driven by a 14.7% increase in Branded Products revenue to $58.122 million. However, net income decreased by 7.7% to $14.127 million from $15.307 million, and diluted EPS fell to $3.42 from $3.74. This decline in profitability occurred despite a significant reduction in interest expense, which dropped to $1.497 million from $2.501 million. The company's cash and cash equivalents increased to $32.175 million from $27.802 million at March 30, 2025, reflecting strong cash flow from operating activities of $9.938 million. Total liabilities decreased to $68.770 million from $69.989 million, and stockholders' deficit improved to $(5.903) million from $(16.513) million, indicating a strengthening balance sheet.

Why It Matters

Nathan's Famous's ability to grow revenue, particularly in its Branded Products segment, suggests continued brand strength and market penetration, which is positive for investors. However, the decline in net income and diluted EPS, despite lower interest expenses, indicates potential margin pressures or increased operating costs that warrant investor scrutiny. For employees and customers, stable revenue growth could imply business stability, but a dip in profitability might signal a need for cost efficiencies. In the competitive fast-food and packaged goods market, maintaining profitability while expanding revenue is crucial for long-term viability and market share against rivals like Oscar Mayer or Ball Park.

Risk Assessment

Risk Level: medium — While Nathan's saw an 8% increase in total revenues for the twenty-six weeks ended September 28, 2025, net income decreased by 7.7% to $14.127 million from $15.307 million in the prior year. This decline in profitability, despite revenue growth and reduced interest expense, suggests potential operational inefficiencies or rising costs, which could impact future earnings stability.

Analyst Insight

Investors should closely monitor Nathan's Famous's upcoming earnings calls for detailed explanations on the net income decline and strategies to improve profitability. Consider holding existing positions but deferring new investments until there's clearer evidence of margin stabilization or improvement, especially given the strong revenue growth.

Financial Highlights

debt To Equity

-0.90

revenue

$92.685M

operating Margin

N/A

total Assets

$62.867M

total Debt

$49.309M

net Income

$14.127M

eps

$3.42

gross Margin

N/A

cash Position

$32.175M

revenue Growth

+8.0%

Revenue Breakdown

Key Numbers

• $92.685M — Total Revenues (Increased 8% for the twenty-six weeks ended September 28, 2025, from $85.876 million.)
• $14.127M — Net Income (Decreased 7.7% for the twenty-six weeks ended September 28, 2025, from $15.307 million.)
• $3.42 — Diluted EPS (Decreased from $3.74 for the twenty-six weeks ended September 28, 2025.)
• $58.122M — Branded Products Revenue (Increased 14.7% for the twenty-six weeks ended September 28, 2025, from $50.682 million.)
• $32.175M — Cash and Cash Equivalents (Increased from $27.802 million at March 30, 2025.)
• $9.938M — Net Cash Provided by Operating Activities (For the twenty-six weeks ended September 28, 2025.)
• $1.497M — Interest Expense (Decreased from $2.501 million for the twenty-six weeks ended September 28, 2025.)
• $(5.903)M — Total Stockholders' Deficit (Improved from $(16.513) million at March 30, 2025.)

Key Players & Entities

• NATHANS FAMOUS, INC. (company) — registrant
• Bloomberg (company) — publisher
• SEC (regulator) — filing authority
• $92.685 million (dollar_amount) — total revenues for 26 weeks ended Sep 28, 2025
• $14.127 million (dollar_amount) — net income for 26 weeks ended Sep 28, 2025
• $3.42 (dollar_amount) — diluted EPS for 26 weeks ended Sep 28, 2025
• $32.175 million (dollar_amount) — cash and cash equivalents at Sep 28, 2025
• $58.122 million (dollar_amount) — Branded Products revenue for 26 weeks ended Sep 28, 2025
• Oscar Mayer (company) — competitor
• Ball Park (company) — competitor

FAQ

Industry Context

Nathan's Famous operates in the highly competitive quick-service restaurant (QSR) and branded food product markets. The industry is characterized by evolving consumer preferences for convenience, health, and value. Key trends include the growth of delivery services, plant-based options, and the ongoing need for strong brand differentiation.

Regulatory Implications

As a publicly traded company, Nathan's Famous is subject to SEC regulations and reporting requirements. Changes in food safety standards, labeling laws, and marketing regulations could impact operations and costs. Compliance with these regulations is crucial to maintain market access and consumer trust.

What Investors Should Do

1. Monitor Branded Products segment growth
2. Analyze profitability drivers
3. Assess balance sheet improvement

Glossary

Stockholders' Deficit

A situation where a company's total liabilities exceed its total assets, resulting in a negative equity position. (Indicates the company's net worth is negative, though it has improved from $(16.513) million to $(5.903) million.)

Branded Products

Revenue generated from the sale of branded food products, such as packaged goods sold in retail stores. (This segment showed strong growth of 14.7%, contributing significantly to the overall revenue increase.)

Operating lease right-of-use assets, net

The value of assets recognized on the balance sheet representing a company's right to use an asset for a specified period under an operating lease. (Represents the company's long-term rental commitments, which decreased from $4.987 million to $4.242 million.)

Treasury stock

Shares of a company's own stock that it has repurchased from the open market. (The company holds a significant amount of treasury stock ($86.662 million), which reduces total stockholders' equity.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, Nathan's Famous reported an 8% increase in total revenues, reaching $92.685 million, largely propelled by a 14.7% surge in Branded Products revenue. However, net income saw a 7.7% decrease to $14.127 million, and diluted EPS fell to $3.42 from $3.74. While interest expense was reduced, this was not enough to offset other factors impacting profitability. The company's balance sheet shows improvement, with cash increasing and total liabilities decreasing, leading to a better stockholders' deficit position.

Filing Documents

• nath20250928_10q.htm (10-Q) — 1521KB
• ex_880585.htm (EX-31.1) — 12KB
• ex_880586.htm (EX-31.2) — 12KB
• ex_880587.htm (EX-32.1) — 5KB
• ex_880588.htm (EX-32.2) — 5KB
• 0001437749-25-033452.txt ( ) — 7997KB
• nath-20250928.xsd (EX-101.SCH) — 67KB
• nath-20250928_def.xml (EX-101.DEF) — 397KB
• nath-20250928_lab.xml (EX-101.LAB) — 349KB
• nath-20250928_pre.xml (EX-101.PRE) — 443KB
• nath-20250928_cal.xml (EX-101.CAL) — 55KB
• nath20250928_10q_htm.xml (XML) — 1696KB

Financial Statements

Financial Statements. 3 Condensed Consolidated Balance Sheets – September 28, 2025 (Unaudited) and March 30, 2025 3 Condensed Consolidated Statements of Earnings (Unaudited) – Thirteen and Twenty-six Weeks Ended September 28, 2025 and September 29, 2024 4 Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) – Thirteen Weeks Ended September 28, 2025 and September 29, 2024 5 Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) – Twenty-six Weeks Ended September 28, 2025 and September 29, 2024 6 Condensed Consolidated Statements of Cash Flows (Unaudited) – Twenty-six Weeks Ended September 28, 2025 and September 29, 2024 7 Notes to Condensed Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. 22 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 33 Item 4.

Controls and Procedures

Controls and Procedures. 34 PART II. OTHER INFORMATION 35 Item 1. Legal Proceedings. 35 Item 1A. Risk Factors. 35 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 35 Item 3. Defaults Upon Senior Securities. 35 Item 4. Mine Safety Disclosures. 35 Item 5. Other Information. 35 Item 6. Exhibits. 36

SIGNATURES

SIGNATURES 37 -2-

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. Nathan ' s Famous, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS September 28, 2025 and March 30, 2025 (in thousands, except share and per share amounts) September 28, 2025 March 30, 2025 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents (Note E) $ 32,175 $ 27,802 Accounts and other receivables, net (Note G) 21,613 14,064 Inventories 945 1,221 Prepaid expenses and other current assets (Note H) 683 2,048 Total current assets 55,416 45,135 Property and equipment, net of accumulated depreciation of $ 12,672 and $ 12,295 , respectively 2,013 2,114 Operating lease right-of-use assets, net (Note Q) 4,242 4,987 Goodwill 95 95 Intangible asset, net (Note I) 435 522 Deferred income taxes 570 510 Other assets 96 113 Total assets $ 62,867 $ 53,476 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Current portion of long-term debt (Note P) $ 2,400 $ 2,400 Accounts payable 8,142 6,163 Accrued expenses and other current liabilities (Note K) 5,010 5,969 Current portion of operating lease liabilities (Note Q) 1,933 1,923 Deferred franchise fees 250 309 Total current liabilities 17,735 16,764 Long-term debt, net of unamortized debt issuance costs of $ 291 and $ 327 , respectively (Note P) 46,909 48,073 Long-term portion of operating lease liabilities (Note Q) 2,631 3,528 Other liabilities 864 927 Deferred franchise fees 631 697 Total liabilities 68,770 69,989 COMMITMENTS AND CONTINGENCIES (Note R) STOCKHOLDERS' DEFICIT Common stock, $ .01 par value; 30,000,000 shares authorized; 9,379,025 shares issued; and 4,089,510 shares outstanding at September 28, 2025 and March 30, 2025 94 94 Additional paid-in capital 64,064 63,492 Retained earnings 16,601 6,563 Stockholders' equity before treasury stock 80,759 70,149 Treasury stock, at cost, 5,289,515 shares at September

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View this 10-Q filing on SEC EDGAR