News

Nathan's Famous foodservice sales up 16.4 percent

November 11, 2013

Nathan's Famous Inc. reported results for the second quarter of its 2014 fiscal year that ended Sept. 29, including a 10.8 percent increase in revenues compared to the same period last year.

Sales from the company's Branded Product Program, featuring the sale of Nathan's hot dogs to the foodservice industry, increased by 16.4 percent to $27.1M during the 26 weeks ended Sept. 29.

In March 2014, the brand's new license agreement will commence with John Morrell & Co. replacing SMG Inc. as Nathan's exclusive licensee to manufacture and sell branded hot dog, sausage and corned beef products at retail. Under the John Morrell Agreement, the minimum guarantee for the first year is $10M, and the company expects royalties to exceed the minimum.

Finally, sales from Nathan's company-owned restaurants were $9.5M during the 26 weeks ended Sept. 29, as compared to $10.6M the previous year. The decline in sales was due to the following:

• The Flagship Coney Island restaurant, which was severely damaged by Superstorm Sandy, was not fully repaired and did not reopen until May 20, 2013, and operated for only 18 weeks of the current fiscal year, compared to the full 26 weeks at this point of fiscal 2013; and
• The temporary closing of the Yonkers restaurant for redevelopment since December 2012. Nathan's estimates that these two factors negatively impacted the sales comparison by approximately $1,895,000.

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