News

Last 13 weeks full of suffering for Nathan's Famous

November 4, 2016

Nathan's Famous, Inc. reported its results for the quarter ending Sept. 25 without any comment from company executives and with strong indications that performance has been sliding for the brand during the lpast 13 weeks. The only good news is the company appears to be salvaging itself thanks to its far better performance in the previous quarter.

For the 13 weeks, ending Sept. 25 this year, highlights include:

• A drop in income from operations to $8,031,000, compared to $8,426,000 during the same period last year. Adjusted EBITDA fell to $8,610,000 as compared to $9,006,000 for the previous year's period.
• Net income dropped to $2,507,000, as compared to $2,847,000 the previous year's period.
• Earnings per diluted share dropped four cents from the previous year's same period to $0.60 per share.
• Revenues totaled $28,013,000, as compared to $30,619,000 for the same period in 2015.

However, for the longer period of 26 weeks total, ending Sept. 25, 2016, some of the results look better, aside from total revenues, which fell to $57,429,000, versus the total for the same 26 weeks in 2015, which was $61,273,000. Other encouraging highlights for the 26-week period, include:

• Income from operations increased 5.1 percent to $16,855,000, compared to $16,042,000 during the same 26-week period the previous year.
• Adjusted EBITDA also increased 4.2 percent from last year's same period to $17,976,000.
• Net income grew to $6,057,000, a 17.5 percent increase over the same period in 2015.
• Earnings per diluted share for the period this year rose to $1.44 per share, from $1.14 the previous year.

In a news release the company said its license royalties dropped to $11,612,000 for those 26 weeks, compared to $11,792,000 for the same period last year. Total royalties earned under the John Morrell & Co. also dropped to $10,714,000, as compared to $10,932,000 in the previous year's period.

However, the company stated that although the volume of products sold grew 6.9 percent this year, a "more competitive promotional environment this summer led to an 8.2 percent decrease in the average net selling price on which our royalty is calculated," according to a news release.

The company reports it opened three fewer franchised outlets during this year's 26-week period, compared to the 23 opened in 2015's same period. International location openings remained the same both years at seven, as did brand menu program outlets, at 11 total for the period.