NATHANS FAMOUS, INC. (NATH)·Q1 2026 Earnings Summary

Executive Summary

• Q1 FY2026 revenue rose 5.0% year over year to $46.998M, while diluted EPS declined 4.8% to $2.16 as higher beef and trimming costs compressed margins despite pricing actions in the Branded Product Program .
• Branded Product Program revenue increased by $2.93M to $29.075M with average selling price up ~8%, but segment operating income fell by $224K due to beef cost inflation .
• Product licensing royalties decreased 4.2% to $12.381M; Smithfield retail-related royalties fell 4.5% to $11.464M, a notable shift versus FY2025 growth trajectory .
• Dividend maintained: Board declared a $0.50/share quarterly dividend (paid July 1) and another $0.50/share dividend payable September 5; dividend continuity remains a support for the equity story .

What Went Well and What Went Wrong

What Went Well

• Pricing power and revenue growth: Revenues +5% YoY; Branded Product Program sales +$2.93M with average selling price up ~8% YoY, demonstrating pricing traction in foodservice .
• Interest expense tailwind: Interest expense was $758K vs. $1.06M YoY, reducing the drag on net income following the capital structure changes in FY2025 .
• Franchise momentum and restaurant profitability: Eight franchised locations opened; franchise restaurant sales rose to $18.444M; Restaurant operations income from operations improved slightly YoY to $1.068M .

Quote (press release): “Our average selling price, which is partially correlated to the beef markets, increased by approximately 8% as compared to the prior year period.”

What Went Wrong

• Margin compression from beef costs: Income from operations declined to $12.791M (from $13.745M), and Adjusted EBITDA fell to $13.531M (from $14.281M) as higher beef and trimming costs offset pricing gains .
• Licensing softness: Total license royalties decreased to $12.381M; Smithfield retail-related royalties -4.5% YoY to $11.464M, reversing prior-year strength .
• Weather-related traffic pressure: Company-owned restaurant sales declined to $3.986M, with traffic down at Coney Island locations due to unfavorable weather .

Quote (press release): “Sales were negatively impacted due to a decrease in customer traffic, especially at our two Coney Island locations, due to unfavorable weather conditions.”

Financial Results

Consolidated P&L Snapshot (oldest → newest)

Note: Operating margin is calculated from cited revenue and income from operations.

Q1 FY2026 vs. Wall Street Consensus (S&P Global)

S&P Global consensus for Q1 FY2026 EPS and revenue was not available at the time of analysis (GetEstimates returned no consensus values).

Segment Revenue ($USD Millions) (oldest → newest)

Segment Income from Operations ($USD Millions) (oldest → newest)

KPIs and Operational Metrics

Guidance Changes

Note: Company did not issue numeric forward guidance in the Q1 FY2026 press release/8-K .

Earnings Call Themes & Trends

No earnings call transcript was found in filings or IR materials for Q1 FY2026; themes below reflect company disclosures across Q3 FY2025, Q4 FY2025, and Q1 FY2026 press releases.

Management Commentary

• “Our average selling price, which is partially correlated to the beef markets, increased by approximately 8% as compared to the prior year period.”
• “Income from operations decreased…due to an increase in the cost of beef and beef trimmings.”
• “Sales were negatively impacted due to a decrease in customer traffic, especially at our two Coney Island locations, due to unfavorable weather conditions.”
• “License royalties decreased to $12,381,000… Smithfield Foods, Inc., decreased 4.5% to $11,464,000…”

Q&A Highlights

• No public earnings call transcript or Q&A was available in the company’s filings or investor materials for Q1 FY2026; therefore, no Q&A themes or clarifications could be assessed from a call [ListDocuments yielded no transcripts; press release and 8-K only] .

Estimates Context

• S&P Global consensus estimates for Q1 FY2026 revenue and EPS were not available; as a result, we benchmark results against prior-year and prior-quarter performance rather than sell-side expectations (GetEstimates returned no consensus values).

Key Takeaways for Investors

• Pricing power intact but not fully offsetting beef inflation: Branded Product Program pricing (+~8% YoY) supported revenue growth, yet higher beef costs reduced operating income and Adjusted EBITDA—watch for cost normalization or further pricing .
• Licensing softness is the swing factor: After FY2025 strength, Q1 licensing (especially Smithfield retail) contracted—sustained softness would pressure high-margin royalty streams .
• Dividend durability remains a support: Board maintained $0.50/share quarterly dividends, underscoring steady cash returns amid macro variability .
• Improved interest expense trajectory: Lower interest expense YoY offers a modest EPS tailwind following balance sheet actions in FY2025; monitor rates and leverage .
• Restaurant operations exposed to weather and traffic: Company-owned sales were pressured by weather; however, franchise expansion continues, diversifying the footprint .
• Near-term trading lens: Expect shares to react to margin commentary and any signal on beef cost trajectory; upside catalyst would be reacceleration in Smithfield royalties or evidence of cost relief .
• Medium-term thesis: Asset-light, cash-generative model with dividends remains attractive; key debates are sustainability of licensing revenue, ability to pass through costs, and continued franchise growth .

Sources:

• Q1 FY2026 press release and 8-K: revenues, EPS, segment details, dividend declarations, non-GAAP reconciliations .
• Prior quarters’ press releases and 8-Ks for trend analysis .
• Forward-looking risk disclosures (inflation, tariffs, beef costs, labor) .