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NATH Nasdaq· Nathan`s Famous, Inc
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NATH Nasdaq· Nathan`s Famous, Inc
Earnings report Q4 2023

Nathan's Famous, Inc. Reports 6% Increase in Total Revenues for the Thirty-Nine Weeks Ended December 24, 2023

Segments of Revenue

  • Sales revenue increased by approximately 9% to $78.72 million for the thirty-nine weeks ended December 24, 2023, compared to $72.54 million for the same period in 2022.
  • License royalties amounted to $26.08 million for the thirty-nine weeks ended December 24, 2023, slightly higher than the $26.06 million reported in the same period in 2022.
  • Franchise fees and royalties totaled $3.32 million for the thirty-nine weeks ended December 24, 2023, compared to $3.27 million in the same period in 2022.
  • Advertising fund revenue reached $1.50 million for the thirty-nine weeks ended December 24, 2023, similar to the $1.50 million reported in the same period in 2022.

Strengths

  • Nathan's Famous, Inc. experienced a 6% increase in total revenues for the thirty-nine weeks ended December 24, 2023, compared to the same period in 2022. This growth can be attributed to a 9% increase in sales revenue, driven by higher foodservice sales from the Branded Product Program.
  • The company's average net selling price increased by 6% in the fiscal 2024 period, contributing to the growth in sales revenue.
  • Nathan's Famous, Inc. earned higher royalties of $107,000 from the foodservice business in the third quarter fiscal 2024, compared to the same period in 2023.

Challenges

  • Despite the overall increase in total revenues, the company experienced a 12% decrease in retail volume, which partially offset the growth in sales revenue.
  • Royalties earned from all other licensing agreements for the manufacture and sale of Nathan's products decreased by $49,000 during the third quarter fiscal 2024, primarily due to lower royalties earned on sales of franks-in-a-blanket, mozzarella sticks, and other hors d'oeuvres.

Noteworthy

  • Nathan's Famous, Inc. estimates that its unrecognized tax benefit could be further reduced by up to $19,000 during the fiscal year ending March 31, 2024, due to the lapse of statutes of limitations. This would have a favorable impact on the company's effective tax rate.

Summary

Nathan's Famous, Inc. demonstrated a solid performance in the latest quarter, with a 6% increase in total revenues for the thirty-nine weeks ended December 24, 2023. This growth was primarily driven by a 9% increase in sales revenue, supported by higher foodservice sales from the Branded Product Program. The company's average net selling price also contributed to the revenue growth, increasing by 6% in the fiscal 2024 period. However, the company faced challenges with a 12% decrease in retail volume and lower royalties earned from certain licensing agreements. Overall, Nathan's Famous, Inc. remains well-positioned in the market, and its effective tax rate may be positively impacted by the reduction in unrecognized tax benefits.

Source documents

Form 10-Q  filed on Feb 01, 2024
116 pages scanned

Reference data

Company financials Q4 revenue 28.9M
Analyst estimates Q4 EPS missed by NaN%
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