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In the quarter under review, Nathan’s Famous’ gross profit increased 6.6% to $12.2 million. The gross margin expanded 34 basis points (bps) to 42.2%.
Operating Expenses Analysis
Selling, general and administrative expenses increased 5.4% year over year to $4.7 million. Advertising expenses increased 61.3% year over year to $0.5 million. Adjusted operating costs totaled $5.2 million, indicating a 9% uptick from the year-ago quarter.
Profitability
Adjusted operating profit totaled $7 million, indicating a 4.9% uptick from the year-ago quarter. The adjusted operating margin in the fiscal fourth quarter contracted 20 bps to 24.3%.
Adjusted EBITDA in the fiscal fourth quarter amounted to $ 7.3 million, up 2.6% year over year.
In the fiscal fourth quarter, Nathan’s Famous’ net income was $3.9 million, up 19.8% from $3.3 million in the prior-year quarter.
Liquidity & Debt Management
Nathan’s Famous exited fiscal 2024 with cash of $21 million compared with $29.9 million at the fiscal 2023-end. Total long-term debt, net of unamortized debt issuance costs, at the fiscal 2024-end was $59.6 million compared with $79.1 million at the fiscal 2023-end.
Cumulative net cash provided by operating activities at the end of fiscal 2024 was $20 million compared with $19.8 million a year ago.
Our Take
Nathan’s Famous exited the fourth quarter of fiscal 2024 with solid top-line and bottom-line results. Robust performances by all segments were impressive. The gross margin expansion bodes well.
The volume of hot dogs sold by the company during the fiscal year was also encouraging. During the fiscal year, Nathan’s Famous opened 17 new franchised locations, which looks promising.
However, Nathan’s Famous witnessed a contraction in its adjusted operating margin during the reported quarter, which did not bode well. The company also recorded an increase in the cost of beef and beef trimmings, which also raises apprehension.
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Nathan's Famous (NATH) Q4 Earnings Improve Y/Y, Gross Margin Up
Nathan's Famous, Inc. (NATH - Free Report) delivered earnings per share (EPS) of 96 cents in the fourth quarter of fiscal 2024, up 20% year over year.
Full-year EPS was $4.80, flat compared with the fiscal 2023 period.
Revenues in Detail
Nathan’s Famous registered revenues of $28.9 million in the fiscal fourth quarter, up 5.8% year over year.
Robust performances by all segments drove the topline.
Full-year revenues were $138.6 million, indicating a 5.9% uptick from the comparable fiscal 2023 period.
Segment Details
Nathan’s Famous’ operations consist of three business segments — Branded product program, Product licensing and Restaurant operations.
For the quarter under review, the Branded product program reported revenues of $18.3 million, up 7.4% from the year-ago quarter.
Revenues in the Product licensing segment totaled $7.5 million, up 1.6% year over year.
Revenues in the Restaurant operations segment totaled $2.6 million, up 4.5% year over year.
Nathan's Famous, Inc. Price, Consensus and EPS Surprise
Nathan's Famous, Inc. price-consensus-eps-surprise-chart | Nathan's Famous, Inc. Quote
Nathan’s Famous Gross Margin
In the quarter under review, Nathan’s Famous’ gross profit increased 6.6% to $12.2 million. The gross margin expanded 34 basis points (bps) to 42.2%.
Operating Expenses Analysis
Selling, general and administrative expenses increased 5.4% year over year to $4.7 million. Advertising expenses increased 61.3% year over year to $0.5 million. Adjusted operating costs totaled $5.2 million, indicating a 9% uptick from the year-ago quarter.
Profitability
Adjusted operating profit totaled $7 million, indicating a 4.9% uptick from the year-ago quarter. The adjusted operating margin in the fiscal fourth quarter contracted 20 bps to 24.3%.
Adjusted EBITDA in the fiscal fourth quarter amounted to $ 7.3 million, up 2.6% year over year.
In the fiscal fourth quarter, Nathan’s Famous’ net income was $3.9 million, up 19.8% from $3.3 million in the prior-year quarter.
Liquidity & Debt Management
Nathan’s Famous exited fiscal 2024 with cash of $21 million compared with $29.9 million at the fiscal 2023-end. Total long-term debt, net of unamortized debt issuance costs, at the fiscal 2024-end was $59.6 million compared with $79.1 million at the fiscal 2023-end.
Cumulative net cash provided by operating activities at the end of fiscal 2024 was $20 million compared with $19.8 million a year ago.
Our Take
Nathan’s Famous exited the fourth quarter of fiscal 2024 with solid top-line and bottom-line results. Robust performances by all segments were impressive. The gross margin expansion bodes well.
The volume of hot dogs sold by the company during the fiscal year was also encouraging. During the fiscal year, Nathan’s Famous opened 17 new franchised locations, which looks promising.
However, Nathan’s Famous witnessed a contraction in its adjusted operating margin during the reported quarter, which did not bode well. The company also recorded an increase in the cost of beef and beef trimmings, which also raises apprehension.