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NF

NATHANS FAMOUS, INC. (NATH)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered solid top-line growth with revenue of $30.787M (+6.2% YoY) while profitability was mixed as operating income and adjusted EBITDA declined versus prior year; diluted EPS rose to $1.03 from $0.96 on higher net income .
  • Segment results showed continued strength in Product Licensing ($7.901M, +5.3% YoY) while Branded Product Program income softened amid beef input inflation; restaurant operations were negative but improved slightly YoY .
  • The Board declared a regular $0.50 per-share quarterly dividend for fiscal 2026 (payable July 1, 2025), continuing capital returns; later in CY2025, a special $2.50 dividend was declared, highlighting cash generation and balance sheet flexibility .
  • No earnings call transcript was available; estimate comparisons were unavailable via S&P Global, limiting beat/miss assessment; operational commentary points to beef cost inflation as the primary margin headwind in the Branded Product Program .

What Went Well and What Went Wrong

What Went Well

  • Revenue grew 6.2% YoY to $30.787M (vs. $28.991M), and diluted EPS increased to $1.03 (vs. $0.96), driven by higher licensing and stable corporate costs .
  • Product Licensing revenue rose to $7.901M (vs. $7.506M), and FY royalties increased to $37.418M with Smithfield royalties up 12%, underscoring durable brand monetization .
  • Franchise development continued with 25 openings in FY2025; additionally, the Rock Hill, SC free‑standing restaurant opened with enhanced menu and drive‑thru experience, supporting brand reach (“we are incredibly happy with how it turned out,” VP Marketing Phil McCann) .

What Went Wrong

  • Operating income declined to $6.368M (vs. $6.802M) and adjusted EBITDA slipped to $7.096M (vs. $7.282M), reflecting margin pressure versus prior year .
  • Branded Product Program operating income fell to $1.730M (vs. $2.515M); management attributed FY BPP margin compression primarily to a ~7% increase in beef and beef trimmings costs .
  • Restaurant operations posted a loss of $(0.310)M (vs. $(0.339)M) and revenue decreased to $2.273M (vs. $2.626M), indicating continued softness despite Coney Island strength on higher average check in FY commentary .

Financial Results

Headline P&L (quarterly)

MetricQ4 2024Q2 2025Q3 2025Q4 2025
Revenue ($USD)$28,991,000 $41,109,000 $31,519,000 $30,787,000
Operating Income ($USD)$6,802,000 $9,632,000 $6,752,000 $6,368,000
Adjusted EBITDA ($USD)$7,282,000 $10,350,000 $7,479,000 $7,096,000
Net Income ($USD)$3,910,000 $6,030,000 $4,484,000 $4,235,000
Diluted EPS ($)$0.96 $1.47 $1.10 $1.03

Margins

MetricQ4 2024Q2 2025Q3 2025Q4 2025
EBIT Margin %23.5% 23.4% 21.4% 20.7%
Net Income Margin %13.5% 14.7% 14.2% 13.8%

Note: Margins are computed from reported revenue and operating income/net income in cited releases .

Segment Revenue and Operating Income

Segment Revenue ($USD)Q4 2024Q2 2025Q3 2025Q4 2025
Branded Product Program$18,279,000 $24,536,000 $21,099,000 $20,047,000
Product Licensing$7,506,000 $9,491,000 $7,105,000 $7,901,000
Restaurant Operations$2,626,000 $6,522,000 $2,795,000 $2,273,000
Advertising Fund Revenue$580,000 $560,000 $520,000 $566,000
Segment Operating Income ($USD)Q4 2024Q2 2025Q3 2025Q4 2025
Branded Product Program$2,515,000 $697,000 $2,209,000 $1,730,000
Product Licensing$7,460,000 $9,446,000 $7,059,000 $7,856,000
Restaurant Operations$(339,000) $1,781,000 $(86,000) $(310,000)
Corporate$(2,834,000) $(2,292,000) $(2,430,000) $(2,908,000)

KPIs

KPIQ4 2024Q2 2025Q3 2025Q4 2025
Weighted-Average Diluted Shares4,088,000 4,095,000 4,093,000 4,102,000

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Regular Quarterly Dividend per ShareFiscal 2026 Q1 (payable July 1, 2025)$0.50 (declared Feb 6, 2025 for Feb 28, 2025) $0.50 (declared Jun 10, 2025 for Jul 1, 2025) Maintained
Special Dividend per ShareDeclared Nov 6, 2025 (payable Dec 5, 2025)N/A$2.50 New

No revenue/margin/OpEx/tax-rate guidance was provided in the Q4 FY2025 releases/8‑K .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY2025, Q3 FY2025)Current Period (Q4 FY2025)Trend
Beef input inflation impacting BPP marginsCosts up ~3% (Q2) and ~4% (Q3), compressing BPP operating income FY commentary: ~7% increase in beef/trimmings; Q4 BPP income lower YoY Worsening cost pressure YoY
Smithfield licensing royalties+13% YTD (Q2, Q3), resilient licensing growth FY royalties $37.418M; Smithfield royalties +12% YoY Strong/steady
Restaurant operations performanceMixed; Oceanside/Yonkers offsets Coney Island strength (Q2, Q3) Q4 revenue down YoY; operating loss, slight improvement vs prior year Soft
Franchise development21 openings YTD by Q2; 24 by Q3 25 openings FY; new free‑standing Rock Hill design opened Positive
Capital returns (dividends)Regular $0.50 declared/paid through Q3 Regular $0.50 declared for fiscal 2026; later special $2.50 (Nov 2025) Increasing (special dividend)

Management Commentary

  • FY BPP margin pressure primarily reflected a 7% increase in the cost of beef and beef trimmings, offsetting volume (+1.2%) and higher average selling price (+5%) during FY2025 .
  • Licensing remains a core earnings pillar, with total FY royalties of $37.418M and Smithfield royalties increasing 12% YoY, highlighting brand strength across retail and foodservice programs .
  • Restaurant performance benefitted at Coney Island from higher average check, though overall FY franchise royalties and fees were modestly lower YoY; advertising revenue stable YoY .
  • On format innovation, “this is the first free‑standing restaurant with our new design, and we are incredibly happy with how it turned out,” said Phil McCann, VP of Marketing, referring to Rock Hill, SC .

Q&A Highlights

No Q4 FY2025 earnings call transcript was available; therefore Q&A themes and any guidance clarifications cannot be assessed from a call transcript [ListDocuments 2025 showed 0 transcripts].

Estimates Context

  • S&P Global consensus estimates for Q4 FY2025 were unavailable for EPS and revenue, limiting beat/miss analysis. Values retrieved from S&P Global.*
MetricQ4 2025 ConsensusQ4 2025 Actual
Revenue ($USD)N/A*$30,787,000
Diluted EPS ($)N/A*$1.03

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Top-line momentum continued: revenue rose to $30.787M (+6.2% YoY), with diluted EPS at $1.03 (vs. $0.96), indicating resilient brand monetization despite input cost pressures .
  • Licensing is the earnings anchor: Q4 Product Licensing revenue rose to $7.901M YoY, and FY royalties reached $37.418M (Smithfield +12% YoY), reinforcing a high‑margin, asset‑light driver .
  • Margin headwinds persist in BPP: Q4 BPP operating income declined to $1.730M (vs. $2.515M), consistent with FY commentary about ~7% beef/trimmings inflation impacting profitability .
  • Restaurant operations remain a watch item: Q4 segment revenue fell to $2.273M with a $(0.310)M operating loss; operational execution at key locations offsets broader softness .
  • Capital returns intact and increasing: regular $0.50 dividend declared for fiscal 2026, followed by a special $2.50 dividend in November 2025—catalysts that underscore cash flow strength .
  • Absent consensus data and a call transcript, near‑term investor focus should be on cost trajectory (beef markets), licensing momentum with Smithfield, and BPP pricing/mix to support margins .
  • Medium term, continued franchise development (25 FY openings; new free‑standing model) and advertising/brand initiatives can broaden distribution and support growth, while vigilance on input costs and restaurant segment profitability remains critical .