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NF

NATHANS FAMOUS, INC. (NATH)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY2026 revenue grew 11.1% year over year to $45.69M, but profitability softened: diluted EPS fell to $1.26 from $1.47 and income from operations declined to $7.50M, reflecting margin pressure from higher beef costs in the Branded Product Program .
  • Management declared both the regular $0.50 quarterly dividend and a special cash dividend of $2.50 per share, a notable capital return that may act as a stock catalyst .
  • Segment mix was mixed: Branded Product Program revenue up to $29.05M, yet segment operating income swung to a loss of $(1.08)M; licensing revenue dipped to $9.23M, while restaurant operations rose to $6.85M .
  • No earnings call transcript was available; there was no explicit forward financial guidance beyond dividends. Consensus estimates from S&P Global were not available for EPS or revenue this quarter (coverage limited) .

What Went Well and What Went Wrong

What Went Well

  • Revenue rose to $45.69M (+$4.58M YoY), driven by higher Branded Product Program sales and improved restaurant operations .
  • Restaurant operations posted stronger operating income ($1.99M vs. $1.78M YoY), benefiting from performance at Coney Island locations across the fiscal YTD context .
  • Capital returns accelerated: Board declared a regular $0.50 dividend and a special $2.50 dividend payable December 5, 2025, underscoring balance sheet and cash flow strength .
    • “Effective November 6, 2025, the Board of Directors declared a special cash dividend of $2.50 per share payable on December 5, 2025” .

What Went Wrong

  • Branded Product Program margins compressed sharply; segment operating income turned negative $(1.08)M in Q2 (vs. $0.70M YoY) due primarily to a 16% increase in the cost of beef and beef trimmings across the fiscal YTD period .
  • Licensing royalties declined to $9.23M in Q2 (vs. $9.49M YoY), and Smithfield-related royalties decreased 4% on a YTD basis, pressuring high-margin licensing income .
  • Consolidated profitability contracted: income from operations fell to $7.50M (vs. $9.63M YoY), Adjusted EBITDA declined to $8.28M (vs. $10.35M YoY), and diluted EPS dropped to $1.26 (vs. $1.47 YoY) .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ4 FY2025 (Mar 30, 2025)Q1 FY2026 (Jun 29, 2025)Q2 FY2026 (Sep 28, 2025)
Revenue ($USD Millions)$30.787 $46.998 $45.687
Diluted EPS ($USD)$1.03 $2.16 $1.26
EBITDA Margin %21.42%*27.70%*16.94%*
EBIT Margin %20.68%*27.22%*16.42%*
Net Income Margin %13.76%*19.00%*11.38%*

Values retrieved from S&P Global.*

Year-over-Year Comparison (Q2 FY2025 vs Q2 FY2026)

MetricQ2 FY2025 (Sep 29, 2024)Q2 FY2026 (Sep 28, 2025)
Revenue ($USD Millions)$41.109 $45.687
Income from operations ($USD Millions)$9.632 $7.502
Adjusted EBITDA ($USD Millions)$10.350 $8.280
Diluted EPS ($USD)$1.47 $1.26

Segment Breakdown (Q2 FY2026 vs Q2 FY2025)

SegmentQ2 FY2025 Revenue ($USD Millions)Q2 FY2026 Revenue ($USD Millions)Q2 FY2025 Op Income ($USD Millions)Q2 FY2026 Op Income ($USD Millions)
Branded Product Program$24.536 $29.047 $0.697 $(1.082)
Product Licensing$9.491 $9.227 $9.446 $9.181
Restaurant Operations$6.522 $6.847 $1.781 $1.993
Corporate/Advertising$0.560 $0.566 $(2.292) $(2.590)
Total$41.109 $45.687 $9.632 $7.502

KPIs and Operational Metrics (YTD context where specified)

KPIPeriodValue
Branded Product Program sales26 weeks ended Sep 28, 2025$58.122M
Hot dog volume growth26 weeks ended Sep 28, 2025+3%
Average selling price (ASP)26 weeks ended Sep 28, 2025+~10% YoY
Beef and trimmings cost inflation26 weeks ended Sep 28, 2025+16% YoY
Licensing royalties (Smithfield retail + foodservice)26 weeks ended Sep 28, 2025$19.853M (−4% YoY)
Franchise operations revenue26 weeks ended Sep 28, 2025$2.352M; franchise sales $38.316M
Franchise locations opened26 weeks ended Sep 28, 202514
Dividends declaredNov 6, 2025Regular $0.50 and Special $2.50 per share

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Regular DividendQ3 FY2026 (payable Dec 5, 2025)$0.50 per share declared June 10, 2025 $0.50 per share reaffirmed Nov 6, 2025 Maintained
Special DividendQ3 FY2026 (payable Dec 5, 2025)N/A$2.50 per share declared Nov 6, 2025 Added
Revenue/Margins/OpEx/Tax/SegmentsFY2026None providedNone providedN/A (no explicit guidance)

Earnings Call Themes & Trends

No Q2 FY2026 earnings call transcript was available; themes are drawn from press releases.

TopicPrevious Mentions (Q4 FY2025)Previous Mentions (Q1 FY2026)Current Period (Q2 FY2026)Trend
Beef cost inflation+7% YTD inflation; Branded Product Program operating income down YoY Beef/trimmings costs up; segment op income down $0.224M YoY +16% YTD inflation cited; segment op income negative $(1.08)M Worsening cost pressure
Branded Product Program pricing/volumeASP +~5% YoY; volume +~1.2% ASP +~8% YoY ASP +~10% YoY; volume +3% Pricing power sustained; volume improving
Licensing revenue (Smithfield)+12% YoY (FY25) −4.5% YoY (Q1) −4% YoY (YTD) Softening vs prior year
Restaurant performanceFY25: higher avg check, Coney Island strength Weather hurt Coney Island traffic YTD: Coney Island strength offsets Oceanside/Yonkers softness Mixed; location-dependent
Franchise openings25 opened in FY25 8 in Q1 14 YTD by Q2 Healthy pipeline
Capital returnsRegular dividend maintained Regular $0.50 declared Regular $0.50 and special $2.50 Increasing capital return intensity

Management Commentary

  • The Company highlighted that Branded Product Program sales increased to $58.12M YTD, with hot dog volume up 3% and ASP up ~10%, while cost of beef and trimmings rose 16%, compressing segment profitability .
  • Licensing royalties decreased to $21.61M YTD, with Smithfield-related royalties down 4% to $19.85M, signaling softer retail dynamics versus the prior year .
  • Restaurant operations benefited from higher sales at Coney Island, partially offset by lower sales in Oceanside and Yonkers, reflecting localized demand variability .
  • “Effective November 6, 2025, the Board of Directors declared a special cash dividend of $2.50 per share payable on December 5, 2025” — a notable shareholder return action .

Q&A Highlights

  • No earnings call transcript was available for Q2 FY2026; therefore, no Q&A themes or clarifications could be assessed [functions.ListDocuments, 2025-08-01 to 2025-12-31 returned none].

Estimates Context

  • Wall Street consensus estimates via S&P Global were not available for EPS or revenue for Q2 FY2026 (no covering estimates observed). As a result, we cannot assess beats/misses versus consensus this quarter [functions.GetEstimates].
  • Given limited analyst coverage, future estimate revisions may be minimal; internal drivers (beef costs, licensing trends, restaurant mix) are likely to dictate narrative more than Street consensus .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Revenue growth masked margin stress: consolidated operating income and Adjusted EBITDA declined YoY, primarily due to elevated beef/trimmings costs impacting the Branded Product Program .
  • The Branded Product Program showed strong pricing power and modest volume gains, but cost inflation turned segment operating income negative — monitor commodity cost trajectory and any hedging/sourcing actions .
  • Licensing softness (Smithfield) reduced high-margin income; track retail/foodservice sell-through to gauge stabilization or further decline .
  • Restaurant operations improved YoY, aided by Coney Island; localized underperformance persists in Oceanside/Yonkers — watch regional traffic and weather seasonality effects .
  • Capital return stepped up materially: the special $2.50 dividend is a near-term catalyst and signals confidence in cash generation and balance sheet .
  • With no explicit guidance and sparse Street coverage, quarterly prints and commodity trends will drive the stock; downside risk if beef inflation persists, upside if costs normalize and licensing stabilizes .
  • Absent an earnings call, rely on press releases for commentary; consider engaging IR for further detail on cost mitigation and licensing trajectory .
Note: No Q2 FY2026 earnings call transcript was found during the period search (Aug–Dec 2025).
``` [functions.ListDocuments, 2025-08-01 to 2025-12-31 returned none]