NATHANS FAMOUS, INC.
For the period ended Dec 28, 2025. Filed Feb 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 28, 2025 · Filed Feb 5, 2026
NATH$102.05+0.1%Stored close · as of Oct 23, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-28; filed 2025-11-06.
0001437749-25-033452
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-28; filed 2026-02-05.
0001437749-26-003087
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 134 previous paragraphs and 147 current paragraphs.
64 unchanged; 59 reworded; 22 added; 9 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Merger Agreement
Current report
As previously announced, on January 20, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Smithfield Foods, Inc., a Virginia corporation (“Buyer”) and Boardwalk Merger Sub, Inc. a Delaware corporation and wholly owned subsidiary of Buyer (“Merger Sub”).
Current report
Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof and in accordance with the General Corporation Law of the State of Delaware (“DGCL”), Merger Sub shall merge with and into the Company (the “Merger,” and the effective time of the Merger, the “Effective Time”). As a result of the Merger, at the Effective Time, the separate corporate existence of Merger Sub shall cease, the Company shall continue as the surviving corporation in the Merger (the “Surviving Corporation”) and the Surviving Corporation shall become a wholly owned subsidiary of Buyer. After the Merger, the Company will cease to be publicly traded.
Current report
At the Effective Time, as a result of the Merger and without any action on the part of Buyer, Merger Sub, the Company or the holders of any of the following securities: (i) each share of common stock of the Company, par value $0.01 per share (“Company Shares”), issued and outstanding immediately prior to the Effective Time, other than shares to be cancelled in accordance with the terms of the Merger Agreement and shares owned by holders that have exercised their appraisal rights under the DGCL, shall be converted into the right to receive cash in an amount equal to $102.00 without interest (the “Per Share Merger Consideration”), less any applicable withholding tax, payable to the holder in accordance with the terms of the Merger Agreement, (ii) each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one fully paid, non-assessable share of common stock, par value $0.01 per share, of the Surviving Corporation, and (iii) any Company Shares owned or held in treasury by the Company and any Company Shares owned by Buyer, Merger Sub or any of their respective affiliates immediately prior to the Effective Time shall automatically be cancelled and shall cease to exist and no consideration shall be delivered in exchange for such cancellation or retirement. From and after the Effective Time, all Company Shares converted into the right to receive the Per Share Merger Consideration shall no longer be issued and outstanding and shall automatically be cancelled and cease to exist.
Current report
Immediately prior to the Effective Time, (i) each option to purchase Company Shares outstanding under a Company Stock Plan (each a “Company Stock Option”), whether or not vested and exercisable, that is outstanding and unexercised immediately prior to the Effective Time, shall be automatically converted into the right to receive from Buyer or the Surviving Corporation an amount in cash (subject to applicable withholding taxes) equal to the product obtained by multiplying (A) the excess, if any, of the Per Share Merger Consideration over the per share exercise price of such Company Stock Option, by (B) the aggregate number of Company Shares that were issuable upon exercise of such Company Stock Option immediately prior to the Effective Time and (ii) each restricted stock unit of the Company granted and outstanding pursuant to a Company Stock Plan (each a “Company RSU”) shall be deemed to have been earned and become fully vested (in the case of any performance based award, with the applicable performance metrics at the target level), shall be canceled and extinguished as of the Effective Time and, in exchange, each former holder of any such Company RSU shall have the right to receive from Buyer or the Surviving Corporation an amount in cash equal to the product obtained by multiplying (A) the number of Company Shares subject to such Company RSU by (B) the Per Share Merger Consideration (such amount, the “RSU Award Payment”). Any dividend equivalents earned prior to the Effective Time will be paid in cash as soon as administratively practicable following settlement of the Company RSUs. From and after the Effective Time, each Company RSU shall no longer represent the right to receive Company Shares by the former holder thereof, but shall only entitle such holder to the payment of the RSU Award Payment. The Compensation Committee of the Company Board will adopt resolutions to provide that all Company Stock Options and Company RSUs shall terminate conditioned upon, and effective immediately prior to, the Effective Time and the holders thereof will be entitled only to the amount, if any, specified herein in respect thereof.
Current report
The Merger Agreement contains representations, warranties and covenants by the parties customary for a transaction of this nature. Among other things, during the period between the execution of the Merger Agreement and the earlier of the consummation of the Merger or termination of the Merger Agreement, the Company has agreed to conduct its business in the ordinary course consistent with past practice and has agreed to certain other operating covenants, as set forth more fully in the Merger Agreement. Notwithstanding the foregoing, the Company will be permitted to declare and pay up to two regular quarterly cash dividends, each in the amount of $0.50 per Company Share.
Current report
The Company has also agreed not to, among other things, (i) solicit, initiate, knowingly encourage or knowingly facilitate any alternative competing transaction, (ii) participate in any discussions or negotiations with any third party with respect to any alternative competing transaction, (iii) approve or recommend any alternative competing transaction, (iv) enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, share purchase agreement, asset purchase agreement, share exchange agreement, option agreement or other similar definitive agreement relating to an alternative competing transaction or (v) propose or agree to do any of the foregoing.
Current report
Notwithstanding the foregoing customary “no-shop” restrictions, if prior to obtaining the Company Stockholder Approval (as defined in the Merger Agreement) the Company receives an unsolicited written Acquisition Proposal (as defined in the Merger Agreement) from a third party and the Company Board determines in good faith that (x) such Acquisition Proposal constitutes or could be reasonably expected to result in a Superior Proposal (as defined in the Merger Agreement) and (y) the failure to take the actions set forth in clauses (i) and (ii) of this paragraph would be inconsistent with its fiduciary duties under law, the Company may, in response to such Acquisition Proposal, (i) furnish Company information and access to the third party making such Acquisition Proposal and (ii) participate in discussions or negotiations with such third party with respect to such Acquisition Proposal, or otherwise cooperate with or assist or participate in, or facilitate, any such discussions or negotiations.
Current report
As soon as reasonably practicable after the execution of the Merger Agreement (and in any event within forty-five (45) days after the date of the Merger Agreement), the Company shall prepare and file with the Securities and Exchange Commission (the “SEC”) a proxy statement (as amended or supplemented from time to time, the “Proxy Statement”), in preliminary form, relating to the Stockholders’ Meeting (as defined below). The Company shall hold a meeting for the purpose of obtaining approval of the stockholders of the Company (the “Stockholders’ Meeting”) as promptly as reasonably practicable, and in no event more than thirty (30) days following the date on which the definitive Proxy Statement is mailed to stockholders of the Company, which mailing shall occur within ten (10) business days after the later of the date (i) on which the Company learns the SEC staff has no further comments on the Proxy Statement or (ii) (A) the applicable waiting period under any applicable Antitrust Law, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") has expired or has been terminated and (B) CFIUS Clearance (as defined in the Merger Agreement) has been obtained.
Current report
The consummation of the Merger is subject to certain closing conditions, including but not limited to (a) receipt of the Company Stockholder Approval, (b) that no law or governmental order prohibits, restrains, enjoins or makes illegal the consummation of the Merger, (c) that any waiting period (and any extension thereof) applicable to the Merger and the other transactions under the HSR Act have terminated or expired and (d) that the parties have obtained CFIUS Clearance for the Merger. Each of Buyer’s, Merger Sub’s, and the Company’s obligation to consummate the Merger is also subject to certain additional conditions, including (i) subject to certain materiality standards, the accuracy of the representations and warranties of the other party or parties, (ii) performance in all material respects by the other party or parties of its or their obligations under the Merger Agreement and (iii) with respect to Buyer’s and Merger Sub’s obligations to consummate the Merger, the absence of a Company Material Adverse Effect (as defined in the Merger Agreement) with respect to the Company.
Current report
The Merger Agreement also contains certain termination provisions for the Company and Buyer, including the right of the Company, in certain circumstances, to terminate the Merger Agreement and accept a Superior Proposal. The Company will be required to pay Buyer a termination fee in cash equal to $10,581,814 if the Merger Agreement is terminated (a) by Buyer because the Company Board changed its recommendation of the Merger, (b) by Buyer or the Company if the approval of the Company’s stockholders is not obtained at the Stockholders’ Meeting and the Company Board previously changed its recommendation of the Merger or (c) (i) by Buyer or the Company following June 22, 2026, subject to extension to October 20, 2026 in accordance with the Merger Agreement (the “End Date”), (ii) by Buyer or the Company because of failure to obtain the approval of the stockholders at the Stockholders’ Meeting or (iii) by Buyer because of certain breaches of the Merger Agreement by the Company, only if, in the case of clauses (i) to (iii), an Acquisition Proposal has been made publicly and within nine (9) months of the termination date the Company consummates or enters into a definitive agreement for an Acquisition Proposal.
Current report
Upon the election of the Company, the Company and Smithfield Packaged Meats Corp., an affiliate of Buyer (“SPMC”), will enter into an amendment to the licensing and supply letter agreement, dated as of December 5, 2012 (the “Licensing Agreement”), by and between Nathan’s Famous Systems, Inc., a subsidiary of the Company, and SPMC, which will extend the term of the Licensing Agreement for an additional four years to March 2, 2036 from the current expiration date of March 2, 2032, and Buyer will be required to pay the Company a termination fee in cash equal to $7,407,270 if the Merger Agreement is terminated (a) because of a CFIUS Turndown (as defined in the Merger Agreement) and the Company is not in material breach of the Merger Agreement at the time of termination or (b) following the End Date if, at such time, (i) a government order or other government action would have prevented the consummation of the Merger (solely as it relates to CFIUS) or the parties have not received CFIUS Clearance, (ii) certain other closing conditions have been satisfied, (iii) the Company's breach of the provisions of the Merger Agreement to obtain certain consents and approvals is not the primary cause of a government order or other government action that would prevent the consummation of the Merger and (iv) the Company is not in material breach of the Merger Agreement at the time of termination.
Current report
On January 20, 2026, the Company entered into letter agreements (each a “Retention Agreement”) with each of Eric Gatoff, Chief Executive Officer of the Company, and Robert Steinberg, the Chief Financial Officer of the Company. Under the Retention Agreements, each such individual is entitled to a cash retention bonus payment if (1) such individual is actively employed by the Company or a subsidiary as of closing under the Merger Agreement and has not given notice of his intent to resign or (2) the individual is terminated by the Company for any reason and closing under the Merger Agreement later occurs. The retention bonus payment amount is $3,250,000 for Mr. Gatoff and $1,050,000 for Mr. Steinberg. As consideration for the retention bonus payment, Mr. Gatoff agreed to non-competition provisions that apply for one (1) year following the termination of his employment by the Company for any reason.
Current report
Restaurant operating expenses were $907,000 in the third quarter fiscal 2026 as compared to $991,000 in the third quarter fiscal 2025*.*The decrease is due primarily to lower credit card processing fees of $59,000, and lower occupancy expenses of $16,000. As a percentage of Company-owned restaurant sales, restaurant operating expenses were 55% in the third quarter fiscal 2026 which was comparable to the third quarter fiscal 2025.
Current report
General and administrative expenses increased by $946,000 or 27% to $4,396,000 in the third quarter fiscal 2026 as compared to $3,450,000 in the third quarter fiscal 2025. The increase in general and administrative expenses was primarily attributable to higher professional fees of $852,000 related to our pending acquisition with Buyer pursuant to the Merger Agreement. Refer to NOTE S – SUBSEQUENT EVENTS in the accompanying condensed consolidated financial statements and “Recent Events – Merger Agreement” above for further information.
Current report
Interest expense of $842,000 in the third quarter fiscal 2025 represented interest expense of $825,000 on the SOFR Term Loan borrowings and amortization of debt issuance costs of $17,000.
Current report
In the third quarter fiscal 2025, the Company made a voluntary prepayment of $8,000,000 on its Term Loan borrowings under the Credit Agreement and recorded a loss on extinguishment of debt of $55,000 related to the write-off of a portion of previously recorded debt issuance costs on the Term Loan borrowings.
Current report
Other income, net was $122,000** **in the third quarter of fiscal 2026 which primarily relates to sublease income and includes $84,000 of settlement income received in connection with the termination of a lease for certain premises located at 281 Walt Whitman Road, Huntington Station, New York on November 4, 2025. Other income, net was $21,000 in the third quarter of fiscal 2025 which primarily relates to sublease income.
Current report
Interest expense of $2,204,000 in the fiscal 2026 period represented interest expense of $2,151,000 on the SOFR Term Loan borrowings and amortization of debt issuance costs of $53,000.
Current report
Other income, net was $165,000 in the fiscal 2026 period which primarily relates to sublease income and includes $84,000 of settlement income received in connection with the termination of a lease for certain premises located at 281 Walt Whitman Road, Huntington Station, New York on November 4, 2025. Other income, net was $65,000 in the fiscal 2025 period which primarily relates to sublease income.
Current report
The following table presents a summary of our cash flows from operating, investing and financing activities:
Current report
The Company also paid $459,000 for withholding taxes on the net share vesting of 10,000 restricted stock units.
Removed paragraphs (9)
Previous report
This Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve risks and uncertainties. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “projects,” “may,” “would,” “should,” “seeks,” “intends,” “plans,” “estimates,” “anticipates” or similar expressions that relate to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements contained in this Form 10-Q are based upon information available to us on the date of this Form 10-Q.
Previous report
Restaurant operating expenses were $1,432,000 in the second quarter fiscal 2026 as compared to $1,389,000 in the second quarter fiscal 2025. The increase is due primarily to higher repairs and maintenance expenses of $25,000 and higher utilities expenses of $22,000.* *As a percentage of Company-owned restaurant sales, restaurant operating expenses were 25% in the second quarter fiscal 2026 as compared to 26% in the second quarter fiscal 2025.
Previous report
General and administrative expenses increased by $200,000 or 6% to $3,452,000 in the second quarter fiscal 2026 as compared to $3,252,000 in the second quarter fiscal 2025. The increase in general and administrative expenses was primarily attributable to higher professional fees of $23,000, higher share-based compensation expense of $55,000, higher trade show and travel expenses of $25,000 and higher salaries and fringe expenses of $39,000 attributable to annual rate increases.
Previous report
Interest expense of $1,441,000 in the second quarter fiscal 2025 represented interest expense of $458,000** and $930,000 on the 6.625% Secured Notes due 2025 (“2025 Notes”) which were redeemed in August 2024 and the SOFR Term Loan borrowings, respectively, and amortization of debt issuance costs of $35,000 and $18,000 **on the 2025 Notes and the SOFR Term Loan borrowings, respectively.
Previous report
Other income, net was $22,000 and $23,000 in the second quarter fiscal 2026 and the second quarter fiscal 2025, respectively, which primarily relates to sublease income.
Previous report
Interest expense of $1,497,000 in the fiscal 2026 period represented interest expense of $1,461,000 on the SOFR Term Loan borrowings and amortization of debt issuance costs of $36,000.
Previous report
Other income, net was $43,000 and $44,000 in the fiscal 2026 and fiscal 2025 periods, respectively, which primarily relates to sublease income.
Previous report
The following table presents summary cash flow information for the periods indicated (in thousands):
Previous report
At September 28, 2025, we sublet one property that we lease from a third party. We remain contingently liable for all costs associated with this property including rent, property taxes and insurance. We may incur future cash payments with respect to such property, consisting primarily of future lease payments, including costs and expenses associated with terminating such lease.
Reworded paragraphs (59)
Previous wording
Statements in this Form 10-Q quarterly report may be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties, many of which are not within our control, include but are not limited to: the impact of disease epidemics such as the COVID-19 pandemic; increases in the cost of food and paper products; the impact of price increases on customer visits; the status of our licensing and supply agreements, including our licensing revenue and overall profitability being substantially dependent on our agreement with Smithfield Foods, Inc.; the impact of our debt service and repayment obligations under our Credit Agreement, including the effect on our ability to fund working capital, operations and make investments; economic (including inflationary pressures like those currently being experienced); weather (including the impact on sales at our restaurants particularly during the summer months); changes in the price of beef and beef trimmings; our ability to pass on the cost of any price increases in beef and beef trimmings; legislative and business conditions; potential changes in U.S. income tax or tariff policies; the collectability of receivables; changes in consumer tastes; the continued viability of Coney Island as a destination location for visitors; the ability to attract franchisees; the impact of the minimum wage legislation on labor costs in New York State or other changes in labor laws, including regulations which could render a franchisor as a “joint employer” or the impact of our union contracts; our ability to attract competent restaurant and managerial personnel; the enforceability of international franchising agreements; the future effects of any food borne illness such as bovine spongiform encephalopathy, BSE or e-coli; as well as those risks discussed from time to time in this Form 10-Q and our Form 10-K annual report for the year ended March 30, 2025, and in other documents we file with the U.S. Securities and Exchange Commission. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements. We generally identify forward-looking statements with the words “believe,” “intend,” “plan,” “expect,” “anticipate,” “estimate,” “will,” “should” and similar expressions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Except for historical information contained in this news release, the matters discussed are forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. Words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, and similar expressions identify forward-looking statements, which are based on the current belief of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Among the factors that could cause actual results to differ materially include but are not limited to: the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement or the failure to satisfy the closing conditions; the possibility that the consummation of the proposed transaction is delayed or does not occur, including the failure of Nathan's stockholders to approve the proposed transaction; uncertainty as to whether the parties will be able to complete the proposed transaction on the terms set forth in the Merger Agreement; uncertainty regarding the timing of the receipt of required regulatory approvals for the proposed transaction and the possibility that the parties may be required to accept conditions that could reduce or eliminate the anticipated benefits of the proposed transaction as a condition to obtaining regulatory approvals or that the required regulatory approvals might not be obtained at all; the outcome of any legal proceedings that have been or may be instituted against the parties or others following announcement of the transactions contemplated by the Merger Agreement; challenges, disruptions and costs of integrating and achieving anticipated synergies, or that such synergies will take longer to realize than expected, risks that the proposed transaction and other transactions contemplated by the Merger Agreement disrupt current plans and operations that may harm Nathan's businesses; the amount of any costs, fees, expenses, impairments and charges related to the proposed transaction, and uncertainty as to the effects of the announcement or pendency of the proposed transaction on the market price of Nathan's common stock and/or on its financial performance; the impact of disease epidemics such as the COVID-19 pandemic; increases in the cost of food and paper products; the impact of price increases on customer visits; the status of our licensing and supply agreements, including our licensing revenue and overall profitability being substantially dependent on our agreement with Smithfield Foods, Inc.; the impact of our debt service and repayment obligations under our credit facility, including the effect on our ability to fund working capital, operations and make new investments; economic (including inflationary pressures like those currently being experienced); weather (including the imp…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
At September 28, 2025, our restaurant system, excluding virtual kitchens, was comprised of 227** locations, including 112 franchise locations, and 115 Branded Menu Program locations, as well as four Company-owned restaurants (including one seasonal unit), located in 19 **states, and 12 foreign countries.
Current wording
At December 28, 2025, our restaurant system, excluding virtual kitchens, was comprised of 225 locations, including 112 Branded Menu Program locations, as well as four Company-owned restaurants (including one seasonal unit), located in 18 states, and 12 foreign countries.
Previous wording
At September 29, 2024, our restaurant system, excluding virtual kitchens, was comprised of 243 locations, including 115 franchise locations, and 128 Branded Menu Program locations, as well as four Company-owned restaurants (including one seasonal unit), located in 17** **states, and 13 foreign countries.
Current wording
At December 29, 2024, our restaurant system, excluding virtual kitchens, consisted of 236 locations, including 128 Branded Menu Program locations, and four Company-owned restaurants (including one seasonal unit), located in 17 states, and 12 foreign countries.
Previous wording
As described in our Annual Report on Form 10-K for the year ended March 30, 2025, our future results could be materially impacted by many developments including our dependence on Smithfield Foods, Inc. as our principal supplier and the dependence of our licensing revenue and overall profitability on our agreement with Smithfield Foods, Inc. In addition, our future operating results could be impacted by supply constraints on beef or by increased costs of beef, beef trimmings and other commodities due to inflationary pressures compared to earlier periods.
Current wording
As described in our Annual Report on Form 10-K for the year ended March 30, 2025, our future results could be materially impacted by many developments including our dependence on Smithfield Foods, Inc. as our principal supplier and the dependence of our licensing revenue and overall profitability on our agreement with Smithfield Foods, Inc. In addition, our future operating results could be impacted by supply constraints on beef or by increased costs of beef, beef trimmings and other commodities due to inflationary pressures compared to earlier periods and our proposed transaction with Smithfield Foods, Inc. under the Merger Agreement.
Previous wording
Inflationary pressures impacted our results of operations during the first half of fiscal 2026, and we anticipate continued inflationary pressures on commodity prices, including beef and beef trimmings, as well as labor inflation during the remainder of fiscal 2026. In general, we have been able to offset some of these cost increases resulting from inflation through various actions, such as increasing prices at our Company-owned restaurants and entering into sales agreements with our Branded Product Program customers that are correlated to our cost of beef and beef trimmings. We continue to monitor these inflationary pressures and may need to adjust our prices further to mitigate the impact of these inflationary pressures. Inherent volatility in commodity markets, including beef and beef trimmings, could have a significant impact on our results of operations. Delays in implementing price increases, competitive pressures, a decline in consumer spending levels and other factors may limit our ability to implement further price increases in the future.
Current wording
Inflationary pressures negatively impacted our earnings during the thirty-nine week period ended December 28, 2025, most notably within our Branded Product Program segment, due primarily to commodity prices on beef and beef trimmings. We anticipate continued inflationary pressures on commodity prices, including beef and beef trimmings, as well as rising labor costs during the remainder of fiscal 2026. In general, we have been able to offset some of these cost increases resulting from inflation through various actions, such as increasing prices at our Company-owned restaurants and entering into sales agreements with our Branded Product Program customers that are correlated to our cost of beef and beef trimmings. We continue to monitor these inflationary pressures and may need to adjust our prices further to mitigate the impact of these inflationary pressures. Inherent volatility in commodity markets, including beef and beef trimmings, could have a significant impact on our results of operations. Delays in implementing price increases, competitive pressures, a decline in consumer spending levels and other factors may limit our ability to implement further price increases in the future.
Previous wording
Please refer to Note B of the preceding condensed consolidated financial statements for our discussion of the New Accounting Standards Not Yet Adopted.
Current wording
Please refer to NOTE B – NEW ACCOUNTING STANDARDS NOT YET ADOPTED in the accompanying condensed consolidated financial statements for our discussion of New Accounting Standards Not Yet Adopted.
Previous wording
Due to the above seasonal factors, as well as inflationary pressures, our results of operations for the thirteen and twenty-six weeks ended September 28, 2025 are not necessarily indicative of those for a full fiscal year.
Current wording
Due to the above seasonal factors, as well as inflationary pressures, our results of operations for the thirteen and thirty-nine weeks ended December 28, 2025 are not necessarily indicative of those for a full fiscal year.
Previous wording
Total revenues increased by approximately 11% to $45,687,000 for the thirteen weeks ended September 28, 2025 (“second quarter fiscal 2026”) as compared to $41,109,000 for the thirteen weeks ended September 29, 2024 (“second quarter fiscal 2025”).
Current wording
Total revenues increased by approximately 9% to $34,312,000 for the thirteen weeks ended December 28, 2025 (“third quarter fiscal 2026”) as compared to $31,519,000** **for the thirteen weeks ended December 29, 2024 (“third quarter fiscal 2025”).
Previous wording
Foodservice sales from the Branded Product Program increased by approximately 18% to $29,047,000 for the second quarter fiscal 2026 as compared to $24,536,000 for the second quarter fiscal 2025. During the second quarter fiscal 2026, the total volume of hot dogs sold in the Branded Product Program increased by approximately 7% as compared to the second quarter fiscal 2025.* * Our average selling price increased by approximately 11% as compared to the second quarter fiscal 2025.
Current wording
Foodservice sales from the Branded Product Program increased by approximately 13% to $23,749,000 for the third quarter fiscal 2026 as compared to $21,099,000 for the third quarter fiscal 2025. During the third quarter fiscal 2026, the total volume of hot dogs sold in the Branded Product Program decreased by approximately 3% as compared to the third quarter fiscal 2025.* * Our average selling price, which is partially correlated to the beef markets, increased by approximately 16% as compared to the third quarter fiscal 2025.
Previous wording
Total Company-owned restaurant sales increased by approximately 5% to $5,624,000 during the second quarter fiscal 2026 as compared to $5,348,000 during the second quarter fiscal 2025. Restaurant sales were primarily impacted by higher sales at our Coney Island locations due to a 7% increase in customer traffic.
Current wording
Total Company-owned restaurant sales decreased by approximately 9% to $1,646,000 during the third quarter fiscal 2026 as compared to $1,804,000 during the third quarter fiscal 2025. Restaurant sales were primarily impacted by a 9% decline in customer traffic due to unfavorable weather conditions.* *
Previous wording
License royalties decreased* by approximately 3% to $9,227,000 in the second quarter fiscal 2026 as compared to $9,491,000 in the second quarter fiscal 2025. Total royalties earned on sales of hot dogs from our license agreement with Smithfield Foods, Inc. at retail and foodservice, decreased 2% to $8,389,000 for the second quarter fiscal 2026 as compared to $8,595,000 in the second quarter fiscal 2025. The decrease is due to an 18% decrease in retail volume which was offset, in part, by a 19% increase in net selling price.*The price increases year over year led to a reduction in promotional activities contributing to the decline in volume. The foodservice business earned higher royalties of $54,000 as compared to the second quarter fiscal 2025. Royalties earned from all other licensing agreements for the manufacture and sale of Nathan’s products decreased by $58,000 during the second quarter fiscal 2026 as compared to the second quarter fiscal 2025 primarily due to lower royalties earned on sales of proprietary spices offset, in part, by higher royalties earned on beef sticks.
Current wording
License royalties increased by approximately 4% to $7,385,000 in the third quarter fiscal 2026 as compared to $7,105,000 in the third quarter fiscal 2025. Total royalties earned on sales of hot dogs from our license agreement with Smithfield Foods, Inc. at retail and foodservice increased 5% to $6,462,000 for the third quarter fiscal 2026 as compared to $6,146,000 in the third quarter fiscal 2025. The increase is due to a 15% increase in net selling price which was offset, in part, by a 7% decrease in retail volume.* *The price increases year over year led to a reduction in promotional activities contributing to the decline in volume. The royalties earned on the foodservice business decreased by $37,000 as compared to the third quarter fiscal 2025. Royalties earned from all other licensing agreements for the manufacture and sale of Nathan’s products decreased by $36,000 during the third quarter fiscal 2026 as compared to the third quarter fiscal 2025 primarily due to lower royalties earned on sales of proprietary spices and French fries offset, in part, by higher royalties earned on beef sticks.
Previous wording
Franchise fees and royalties increased by approximately 4% to $1,223,000 in the second quarter fiscal 2026 period as compared to $1,174,000 in the second quarter fiscal 2025. Total royalties were $1,138,000 in the second quarter fiscal 2026 as compared to $1,066,000 in the second quarter fiscal 2025. Royalties earned under the Branded Menu Program were $249,000 in the second quarter fiscal 2026 as compared to $248,000 in the second quarter fiscal 2025. Royalties earned under the Branded Menu Program are not based upon a percentage of restaurant sales but are based upon product purchases. Virtual kitchen royalties were $21,000 in the second quarter fiscal 2026 as compared to $11,000 in the second quarter fiscal 2025. Traditional franchise royalties were $868,000 in the second quarter fiscal 2026 as compared to $807,000 in the second quarter fiscal 2025. Franchise restaurant sales increased to $19,873,000 in the second quarter fiscal 2026 as compared to $18,681,000 in the second quarter fiscal 2025 principally due to higher sales at travel plazas and international venues offset by lower sales at casino locations, primarily in Las Vegas, Nevada.* Comparable domestic franchise sales (consisting of 63* Nathan’s franchised restaurants, excluding sales under the Branded Menu Program) were $15,245,000 ** in the second quarter fiscal 2026 as compared to $15,286,000 in the second quarter fiscal 2025.
Current wording
Franchise fees and royalties were $1,020,000 in the third quarter fiscal 2026 as compared to $991,000 in the third quarter fiscal 2025. Total royalties were $906,000 in the third quarter fiscal 2026 as compared to $897,000 in the third quarter fiscal 2025. Royalties earned under the Branded Menu Program were $162,000 in the third quarter fiscal 2026 as compared to $182,000 in the third quarter fiscal 2025. Royalties earned under the Branded Menu Program are not based upon a percentage of restaurant sales but are based upon product purchases. Virtual kitchen royalties were $46,000 in the third quarter fiscal 2026 as compared to $16,000 in the third quarter fiscal 2025. Traditional franchise royalties were $698,000 in the third quarter fiscal 2026 as compared to $699,000 in the third quarter fiscal 2025. Franchise restaurant sales decreased to $15,962,000** **in the third quarter fiscal 2026 as compared to $16,066,000 in the third quarter fiscal 2025 principally due to lower sales at malls and casino locations, primarily in Las Vegas, Nevada. Comparable domestic franchise sales (consisting of 61 Nathan’s outlets, excluding sales under the Branded Menu Program) were $12,354,000 in the third quarter fiscal 2026 as compared to $13,018,000 in the third quarter fiscal 2025.
Previous wording
At September 28, 2025, 227** *franchised locations, including domestic, international and Branded Menu Program units were operating as compared to 243 franchised locations, including domestic, international and Branded Menu Program units at September 29, 2024. Total franchise fee income was $85,000 in the second quarter fiscal 2026 as compared to $108,000 in the second quarter fiscal 2025. Domestic franchise fee income was $27,000 in the second quarter fiscal 2026 as compared to $35,000 in the second quarter fiscal 2025. International franchise fee income was $53,000 in the second quarter fiscal 2026 as compared to $59,000 in the second quarter fiscal 2025. We recognized $5,000 and $14,000 in forfeited fees in the second quarter fiscal 2026 and the second quarter fiscal 2025, respectively. * During the second quarter fiscal 2026, six franchise locations opened and four franchise locations closed. During the second quarter fiscal 2025, eighteen franchise locations opened and six franchise locations closed.
Current wording
At December 28, 2025, 225 franchised locations, including domestic, international and Branded Menu Program units were operating as compared to 236 franchised locations, including domestic, international and Branded Menu Program units at December 29, 2024. Total franchise fee income was $114,000 in the third quarter fiscal 2026 as compared to $94,000 in the third quarter fiscal 2025. Domestic franchise fee income was $23,000 in the third quarter fiscal 2026 as compared to $25,000 in the third quarter fiscal 2025. International franchise fee income was $53,000 in the third quarter fiscal 2026 as compared to $59,000 in the third quarter fiscal 2025.
Previous wording
Advertising fund revenue, after eliminating Company contributions, was $566,000 during the second quarter fiscal 2026 as compared to $560,000 during the second quarter fiscal 2025.
Current wording
Advertising fund revenue, after eliminating Company contributions, was $512,000 during the third quarter fiscal 2026 as compared to $520,000 during the third quarter fiscal 2025 period.
Previous wording
Overall, our cost of sales increased by approximately 24% to $32,378,000 in the second quarter fiscal 2026 as compared to $26,029,000 in the second quarter fiscal 2025. Our gross profit (calculated as total Branded Products sales plus total Company-owned restaurant sales less cost of sales) was $2,293,000 or 7% during the second quarter fiscal 2026 as compared to $3,855,000 or 13% during the second quarter fiscal 2025.
Current wording
Overall, our cost of sales increased by approximately 18% to $23,138,000 in the third quarter fiscal 2026 as compared to $19,571,000 in the third quarter fiscal 2025. Our gross profit (calculated as total Branded Products sales plus total Company-owned restaurant sales less cost of sales) was $2,257,000 or 9% of sales during the third quarter fiscal 2026 as compared to $3,332,000 or 15% of sales during the third quarter fiscal 2025.
Previous wording
Cost of sales in the Branded Product Program increased by approximately 27% to $29,590,000 in the second quarter fiscal 2026 as compared to $23,318,000 in the second quarter fiscal 2025, primarily due to a 7% increase in the volume of hot dogs sold, as well as a 20% increase in the average cost per pound of our hot dogs. A shrinking supply of cattle due to drought conditions and high input costs, combined with strong industry demand and inflationary pressures have resulted in higher commodity prices, including beef and beef trimmings, contributing to the increase in the average cost per pound of our hot dogs. We did not make any purchase commitments of beef during the second quarter fiscal 2026 or the second quarter fiscal 2025 periods. If the cost of beef and beef trimmings increases and we are unable to pass on these higher costs through price increases or otherwise reduce any increase in our costs through the use of purchase commitments, our margins will be adversely impacted. With respect to Company-owned restaurants, our cost of sales during the second quarter fiscal 2026 was $2,788,000 or 50% of restaurant sales as compared to $2,711,000 or 51% of restaurant sales during the second quarter fiscal 2025. Food and paper costs as a percentage of Company-owned restaurant sales were 23.8%, down from 24.2% in the comparable period of the prior year primarily as a result of certain menu price increases. Labor and related expenses as a percentage of Company-owned restaurant sales were 25.7%, down from 26.5% in the comparable period of the prior year primarily as a result of certain menu price increases and efforts to improve hourly and management labor efficiency, offset by legislative increases in the New York State minimum wage which became effective January 1, 2025.
Current wording
Cost of sales in the Branded Product Program increased by approximately 20% to $21,943,000 in the third quarter fiscal 2026 as compared to $18,336,000 in the third quarter fiscal 2025, primarily due to a 25% increase in the average cost per pound of our hot dogs which was offset, in part, by a 3% decline in the volume of hot dogs sold. A shrinking supply of cattle due to drought conditions and high input costs, combined with strong industry demand and inflationary pressures have resulted in higher commodity prices, including beef and beef trimmings, contributing to the increase in the average cost per pound of our hot dogs. We did not make any purchase commitments of beef during the third quarter fiscal 2026 or the third quarter fiscal 2025. If the cost of beef and beef trimmings increases and we are unable to pass on these higher costs through price increases or otherwise reduce any increase in our costs through the use of purchase commitments, our margins will be adversely impacted. With respect to** Company-owned restaurants, our cost of sales during the third quarter fiscal 2026 was $1,195,000 or 73% of restaurant sales as compared to $1,235,000 or 68% of restaurant sales in the third quarter fiscal 2025. Food and paper costs as a percentage of Company-owned restaurant sales were 27%, up from 26% in the comparable period of the prior year. Labor and related expenses as a percentage of Company-owned restaurant sales were 46% up from 42% in the comparable period of the prior year primarily as a result of legislative increases in the New York State minimum wage which became effective January 1, 2025.
Previous wording
Depreciation and amortization, which primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment, and the amortization of a definite-lived intangible asset, was $236,000 in the second quarter fiscal 2026 as compared to $247,000 in the second quarter fiscal 2025.
Current wording
Depreciation and amortization, which primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment, and the amortization of a definite-lived intangible asset, was $232,000 in the third quarter fiscal 2026 as compared to $235,000 in the third quarter fiscal 2025.
Previous wording
Advertising fund expense, after eliminating Company contributions, was $687,000 during the second quarter fiscal 2026 as compared to $560,000 in the second quarter fiscal 2025. The Company projects that the Advertising Fund normal seasonal deficit will not be fully recovered during the remainder of the fiscal 2026 period and has reflected the projected deficit of $121,000 in the second quarter fiscal 2026 results of operations.
Current wording
Advertising fund expense, after eliminating Company contributions, was $512,000 during the third quarter fiscal 2026 as compared to $520,000 in the third quarter fiscal 2025. The Company projects that the Advertising Fund normal seasonal deficit will not be fully recovered during the remainder of the fiscal 2026 period and has reflected the projected deficit of $121,000 in the fiscal 2026 period results of operations.
Previous wording
Interest expense of $739,000 in the second quarter fiscal 2026 represented interest expense of $722,000** **on the Secured Overnight Financing Rate (“SOFR”) Term Loan borrowings and amortization of debt issuance costs of $17,000.
Current wording
Interest expense of $707,000 in the third quarter fiscal 2026 represented interest expense of $690,000 on the Secured Overnight Financing Rate (“SOFR”) Term Loan borrowings and amortization of debt issuance costs of $17,000.
Previous wording
The reduction in interest expense of $702,000 is due primarily to lower outstanding long-term debt and a lower interest rate associated with our Credit Agreement.
Current wording
The reduction in interest expense of $135,000 is due primarily to lower outstanding long-term debt and a lower interest rate associated with our Credit Agreement.
Previous wording
Interest and dividend income of $236,000 in the second quarter fiscal 2026 represented amounts earned by the Company on its interest bearing money market accounts and money market funds, as compared to $219,000 in the second quarter fiscal 2025 period. The increase is due to higher levels of invested cash earning interest at higher rates in the second quarter fiscal 2026 as compared to the second quarter fiscal 2025.
Current wording
Interest and dividend income of $206,000** in the third quarter fiscal 2026 represented amounts earned by the Company on its interest bearing money market accounts and money market funds as compared to **$183,000 in the third quarter fiscal 2025. The increase is due to a higher level of invested cash earning interest at higher rates in the third quarter fiscal 2026 as compared to the third quarter of fiscal 2025.
Previous wording
The effective income tax rate for the second quarter fiscal 2026 was 26.0% compared to 25.5% in the second quarter fiscal 2025. The effective income tax rate for the second quarter fiscal 2026 reflected income tax expense of $1,822,000 recorded on $7,021,000 of pre-tax income. The effective income tax rate for the second quarter fiscal 2025 reflected income tax expense of $2,069,000 recorded on $8,099,000 of pre-tax income. The effective tax rates are higher than the U.S. Federal statutory rates primarily due to state and local taxes, as well as non-deductible compensation under the Internal Revenue Code Section 162(m). The effective tax rate for the second quarter fiscal 2026 included a favorable discrete adjustment of 0.6%.
Current wording
The effective income tax rate for the third quarter fiscal 2026 was 35.0% as compared to 26.0% in the third quarter fiscal 2025. The effective income tax rate for the third quarter fiscal 2026 reflected income tax expense of $1,664,000 recorded on $4,748,000 of pre-tax income. The effective income tax rate for the third quarter fiscal 2025 reflected income tax expense of $1,575,000 recorded on $6,059,000 of pre-tax income. The effective tax rates are higher than the U.S. Federal statutory rates primarily due to state and local taxes, as well as non-deductible executive compensation under the Internal Revenue Code Section 162(m). The effective income tax rate for the third quarter fiscal 2026 included an unfavorable discrete tax adjustment of 5.3% for non-deductible transaction costs.
Previous wording
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact to our provision for income taxes for the second quarter fiscal 2026.
Current wording
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact to our provision for income taxes for the third quarter fiscal 2026.
Previous wording
The amount of unrecognized tax benefits at September 28, 2025 was $462,000 all of which would impact the Company’s effective tax rate, if recognized. As of September 28, 2025, the Company had approximately $418,000 accrued for the payment of interest and penalties in connection with unrecognized tax benefits.
Current wording
The amount of unrecognized tax benefits at December 28, 2025 was $491,000 all of which would impact the Company’s effective tax rate, if recognized. As of December 28, 2025, the Company had approximately $438,000 accrued for the payment of interest and penalties in connection with unrecognized tax benefits.
Previous wording
Twenty-six weeks ended September 28, 2025 compared to twenty-six weeks ended September 29, 2024
Current wording
Thirty-nine weeks ended December 28, 2025 compared to thirty-nine weeks ended December 29, 2024
Previous wording
Total revenues increased by approximately 8% to $92,685,000 for the twenty-six weeks ended September 28, 2025 (“fiscal 2026 period”) as compared to $85,876,000 for the twenty-six weeks ended September 29, 2024 (“fiscal 2025 period”).
Current wording
Total revenues increased by approximately 8% to $126,997,000 for the thirty-nine weeks ended December 28, 2025 (“fiscal 2026 period”) as compared to $117,395,000 for the thirty-nine weeks ended December 29, 2024 (“fiscal 2025 period”).
Previous wording
Foodservice sales from the Branded Product Program increased by approximately 15% to $58,122,000 for the fiscal 2026 period as compared to $50,682,000 for the fiscal 2025 period. During the fiscal 2026 period, the total volume of hot dogs sold in the Branded Product Program increased by approximately 3% as compared to the fiscal 2025 period. Our average selling price increased by approximately 10% as compared to the fiscal 2025 period.
Current wording
Foodservice sales from the Branded Product Program increased by approximately 14% to $81,871,000 for the fiscal 2026 period as compared to $71,781,000 for the fiscal 2025 period. During the fiscal 2026 period, the total volume of hot dogs sold in the Branded Product Program increased by approximately 1% as compared to the fiscal 2025 period. Our average selling price, which is partially correlated to the beef markets, increased by approximately 12% as compared to the fiscal 2025 period.
Previous wording
Total Company-owned restaurant sales increased by approximately 1% to $9,610,000 during the fiscal 2026 period as compared to $9,547,000 during the fiscal 2025 period. Restaurant sales were primarily impacted by higher sales at our Coney Island locations which were offset by lower sales at our locations in Oceanside and Yonkers, New York.
Current wording
Total Company-owned restaurant sales decreased by approximately 1% to $11,256,000 during the fiscal 2026 period as compared to $11,351,000 during the fiscal 2025 period. Restaurant sales were primarily impacted by a 2% decline in customer traffic offset, in part, by a 1% increase in average check.
Previous wording
License royalties decreased by approximately 4% to $21,608,000 in the fiscal 2026 period as compared to $22,412,000 in the fiscal 2025 period. Total royalties earned on sales of hot dogs from our license agreement with Smithfield Foods, Inc. at retail and foodservice, decreased 4% to $19,853,000 for the fiscal 2026 period as compared to $20,605,000 in the fiscal 2025 period. The decrease is due to a 17%** *decrease in retail volume which was offset, in part, by a 15% increase in net selling price. The price increases year over year led to a reduction in promotional activities contributing to the decline in volume. The foodservice business earned higher royalties of $109,000 as compared to the fiscal 2025 period. Royalties earned from all other licensing agreements for the manufacture and sale of Nathan’s products decreased by $52,000 during the fiscal 2026 period as compared to the fiscal 2025 period primarily due to lower royalties earned on sales of pickles and proprietary spices offset, in part, by higher royalties earned on French fries, onion rings and beef sticks. *
Current wording
License royalties decreased by approximately 2% to $28,993,000 in the fiscal 2026 period as compared to $29,517,000 in the fiscal 2025 period. Total royalties earned on sales of hot dogs from our license agreement with Smithfield Foods, Inc. at retail and foodservice, decreased 2% to $26,315,000 for the fiscal 2026 period as compared to $26,751,000 in the fiscal 2025 period. The decrease is due to a 15%** decrease in retail volume which was offset, in part, by a 15% increase in net selling price. The price increases year over year led to a reduction in promotional activities contributing to the decline in volume. The foodservice business earned higher royalties of $72,000 as compared to the fiscal 2025 period. Royalties earned from all other licensing agreements for the manufacture and sale of Nathan’s products decreased by $88,000 during the fiscal 2026 period as compared to the fiscal 2025 period primarily due to lower royalties earned on sales of pickles and proprietary spices offset, in part, by higher royalties earned on beef sticks.
Previous wording
Franchise fees and royalties increased by approximately 5% to $2,352,000 in the fiscal 2026 period as compared to $2,247,000 in the fiscal 2025 period. Total royalties were $2,139,000 in the fiscal 2026 period as compared to $2,047,000 in the fiscal 2025 period. Royalties earned under the Branded Menu Program were $425,000 in the fiscal 2026 period as compared to $423,000 in the fiscal 2025 period. Royalties earned under the Branded Menu Program are not based upon a percentage of restaurant sales but are based upon product purchases. Virtual kitchen royalties were $36,000 in the fiscal 2026 period as compared to $25,000 in the fiscal 2025 period. Traditional franchise royalties were $1,678,000 in the fiscal 2026 period as compared to $1,599,000 in the fiscal 2025 period. Franchise restaurant sales increased to $38,316,000 in the fiscal 2026 period as compared to $36,334,000 in the fiscal 2025 period principally due to higher sales at travel plazas and international venues offset by lower sales at casino locations, primarily in Las Vegas, Nevada. Comparable domestic franchise sales (consisting of 61 Nathan’s franchised restaurants, excluding sales under the Branded Menu Program) were $28,957,000 in the fiscal 2026 period as compared to $29,379,000 in the fiscal 2025 period.
Current wording
Franchise fees and royalties were $3,372,000 in the fiscal 2026 period as compared to $3,238,000 in the fiscal 2025 period. Total royalties were $3,045,000 in the fiscal 2026 period as compared to $2,944,000 in the fiscal 2025 period. Royalties earned under the Branded Menu Program were $587,000 in the fiscal 2026 period as compared to $604,000 in the fiscal 2025 period. Royalties earned under the Branded Menu Program are not based upon a percentage of restaurant sales but are based upon product purchases. Virtual kitchen royalties were $82,000 in the fiscal 2026 period as compared to $42,000 in the fiscal 2025 period. Traditional franchise royalties were $2,376,000 in the fiscal 2026 period as compared to $2,298,000 in the fiscal 2025 period. Franchise restaurant sales increased to $54,278,000 in the fiscal 2026 period as compared to $52,400,000 in the fiscal 2025 period principally due to higher sales at travel plazas and international venues offset by lower sales at malls and casino locations primarily in Las Vegas, Nevada.* Comparable domestic franchise sales (consisting of 61* **Nathan’s units, excluding sales under the Branded Menu Program) were $41,030,000 in the fiscal 2026 period as compared to $42,009,000 in the fiscal 2025 period.
Previous wording
At September 28, 2025, 227** franchised locations, including domestic, international and Branded Menu Program units were operating as compared to 243 franchised locations, including domestic, international and Branded Menu Program units at September 29, 2024. Total franchise fee income was $213,000 in the fiscal 2026 period as compared to $200,000 in the fiscal 2025 period. Domestic franchise fee income was $50,000 in the fiscal 2026 period as compared to $58,000 in the fiscal 2025 period. International franchise fee income was $107,000 in the fiscal 2026 period as compared to $119,000 in the fiscal 2025 period. We recognized $56,000 and $23,000 in forfeited fees in the fiscal 2026 period and fiscal 2025 period, respectively. During the fiscal 2026 period, fourteen franchise locations opened and seventeen franchise locations closed. During the fiscal 2025 period, twenty-one franchise locations opened and eight **franchise locations closed.
Current wording
At December 28, 2025, 225 franchised locations, including domestic, international and Branded Menu Program units were operating as compared to 236 franchised locations, including domestic, international and Branded Menu Program franchise units at December 29, 2024. Total franchise fee income was $327,000 in the fiscal 2026 period as compared to $294,000 in the fiscal 2025 period. Domestic franchise fee income was $73,000 in the fiscal 2026 period as compared to $83,000 in the fiscal 2025 period. International franchise fee income was $160,000 in the fiscal 2026 period as compared to $178,000 during the fiscal 2025 period. We recognized $94,000** **and $33,000 in forfeited fees in the fiscal 2026 period and fiscal 2025 period, respectively. During the fiscal 2026 period, eighteen franchise locations opened and twenty-three franchise locations closed. During the fiscal 2025 period, twenty-four franchise locations opened and eighteen franchise locations closed.
Previous wording
Advertising fund revenue, after eliminating Company contributions, was $993,000 during the fiscal 2026 period as compared to $988,000 during the fiscal 2025 period.
Current wording
Advertising fund revenue, after eliminating Company contributions, was $1,505,000 in the fiscal 2026 period, as compared to $1,508,000 during the fiscal 2025 period.
Previous wording
Overall, our cost of sales increased by approximately 19% to $60,801,000 in the fiscal 2026 period as compared to $51,270,000 in the fiscal 2025 period. Our gross profit (calculated as total Branded Products sales plus total Company-owned restaurant sales less cost of sales) was $6,931,000 or 10% during the fiscal 2026 period as compared to $8,959,000 or 15% during the fiscal 2025 period.
Current wording
Overall, our cost of sales increased by approximately 18% to $83,939,000 in the fiscal 2026 period as compared to $70,841,000 in the fiscal 2025 period. Our gross profit (calculated as total Branded Products sales plus total Company-owned restaurant sales less cost of sales) was $9,188,000 or 10% of sales during the fiscal 2026 period as compared to $12,291,000 or 15% of sales during the fiscal 2025 period.
Previous wording
Cost of sales in the Branded Product Program increased by 21% to $55,823,000 during the fiscal 2026 period as compared to $46,290,000 during the fiscal 2025 period, primarily due to a 3% increase in the volume of hot dogs sold, as well as a 16% increase in the average cost per pound of our hot dogs. A shrinking supply of cattle due to drought conditions and high input costs, combined with strong industry demand and inflationary pressures have resulted in higher commodity prices, including beef and beef trimmings, contributing to the increase in the average cost per pound of our hot dogs. We did not make any purchase commitments of beef during the fiscal 2026 and 2025 periods. If the cost of beef and beef trimmings increases and we are unable to pass on these higher costs through price increases or otherwise reduce any increase in our costs through the use of purchase commitments, our margins will be adversely impacted. With respect to Company-owned restaurants, our cost of sales during the fiscal 2026 period was $4,978,000 or 52% of restaurant sales which was comparable to $4,980,000 or 52% of restaurant sales in the fiscal 2025 period. Food and paper costs as a percentage of Company-owned restaurant sales were 23.8%, down from 24.8% in the comparable period of the prior year primarily as a result of certain menu price increases. Labor and related expenses as a percentage of Company-owned restaurant sales were 28.0%, up from 27.4% primarily as a result of legislative increases in the New York State minimum wage which became effective January 1, 2025.** **
Current wording
Cost of sales in the Branded Product Program increased by 20% to $77,766,000 during the fiscal 2026 period as compared to $64,626,000 during the fiscal 2025 period, primarily due to a 1% increase in the volume of hot dogs sold, as well as a 19% increase in the average cost per pound of our hot dogs. A shrinking supply of cattle due to drought conditions and high input costs, combined with strong industry demand and inflationary pressures have resulted in higher commodity prices, including beef and beef trimmings, contributing to the increase in the average cost per pound of our hot dogs. We did not make any purchase commitments of beef during the fiscal 2026 and 2025 periods. If the cost of beef and beef trimmings increases and we are unable to pass on these higher costs through price increases or otherwise reduce any increase in our costs through the use of purchase commitments, our margins will be adversely impacted. With respect to Company-owned restaurants, our cost of sales during the fiscal 2026 period was $6,173,000 or 55% of restaurant sales which was comparable to the fiscal 2025 period.** *Food and paper costs as a percentage of Company-owned restaurant sales were 24%, down from 25% in the comparable period of the prior year.*Labor and related expenses as a percentage of Company-owned restaurant sales were 31% up from 29% primarily as a result of legislative increases in the New York State minimum wage which became effective January 1, 2025.
Previous wording
Restaurant operating expenses were $2,611,000 in the fiscal 2026 period as compared to $2,518,000 in the fiscal 2025 period. The increase is due primarily to higher repairs and maintenance expenses of $27,000, higher utilities expenses of $16,000 and higher credit card processing fees of $48,000. As a percentage of Company-owned restaurant sales, restaurant operating expenses were 27.1% in the fiscal 2026 period as compared to 26.4% in the fiscal 2025 period.
Current wording
Restaurant operating expenses were $3,518,000 in the fiscal 2026 period as compared to $3,509,000 in the fiscal 2025 period. The increase is due primarily to higher repairs and maintenance expenses of $39,000, higher utilities expenses of $19,000 and higher delivery fees of $19,000 which were offset, in part, by lower credit card processing fees of $11,000 and lower occupancy expenses of $21,000.* * As a percentage of Company-owned restaurant sales, restaurant operating expenses were 31% in the fiscal 2026 period which was comparable to the fiscal 2025 period.
Previous wording
Depreciation and amortization, which primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment, and the amortization of a definite-lived intangible asset, was $464,000 in the fiscal 2026 period as compared to $496,000 in the fiscal 2025 period.
Current wording
Depreciation and amortization, which primarily consists of the depreciation of fixed assets, including leasehold improvements and equipment, and the amortization of a definite-lived intangible asset, was $696,000 in the fiscal 2026 period as compared to $731,000 in the fiscal 2025 period.
Previous wording
General and administrative expenses increased by approximately $175,000 or 2% to $7,402,000 in the fiscal 2026 period as compared to $7,227,000 in the fiscal 2025 period. The increase in general and administrative expenses was primarily attributable to higher professional fees of $120,000 and higher share-based compensation expense of $155,000 which were offset, in part, by lower trade show and travel expenses of $150,000.
Current wording
General and administrative expenses increased by $1,121,000** **or 10% to $11,798,000 in the fiscal 2026 period as compared to $10,677,000 in the fiscal 2025 period. The increase in general and administrative expenses was primarily attributable to higher share-based compensation expense of $147,000 and higher professional fees of $972,000 related to our pending acquisition with Buyer pursuant to the Merger Agreement. Refer to NOTE S – SUBSEQUENT EVENTS in the accompanying condensed consolidated financial statements and “Recent Events – Merger Agreement” for further information.
Previous wording
Advertising fund expense, after eliminating Company contributions, was $1,114,000 during the fiscal 2026 period as compared to $988,000 in the fiscal 2025 period. The Company projects that the Advertising Fund normal seasonal deficit will not be fully recovered during the remainder of the fiscal 2026 period and has reflected the projected deficit of $121,000 in the second quarter fiscal 2026 results of operations.
Current wording
Advertising fund expense, after eliminating Company contributions, was $1,626,000 in the fiscal 2026 period, as compared to $1,508,000 in the fiscal 2025 period. The Company projects that the Advertising Fund normal seasonal deficit will not be fully recovered during the remainder of the fiscal 2026 period and has reflected the projected deficit of $121,000 in the fiscal 2026 results of operations.
Previous wording
Interest expense of $2,501,000 in the fiscal 2025 period represented interest expense of $1,449,000 and $930,000 on the 2025 Notes and the SOFR Term Loan borrowings, respectively, and amortization of debt issuance costs of $104,000** *and $18,000 on the 2025 Notes and the SOFR Term Loan borrowings, respectively. *
Current wording
Interest expense of $3,343,000 in the fiscal 2025 period represented interest expense of $1,449,000 and $1,755,000 on the 2025 Notes and the SOFR Term Loan borrowings, respectively, and amortization of debt issuance costs of $104,000 and $35,000 on the 2025 Notes and the SOFR Term Loan borrowings, respectively.
Previous wording
The reduction in interest expense of $1,004,000 is due primarily to lower outstanding long-term debt and a lower interest rate associated with our Credit Agreement.
Current wording
The reduction in interest expense of $1,139,000 is due primarily to lower outstanding long-term debt and a lower interest rate associated with our Credit Agreement.
Showing the first 40 of 59 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We recognized $38,000** **and $10,000 in forfeited fees in the third quarter fiscal 2026 and the third quarter fiscal 2025, respectively. During the third quarter fiscal 2026, four franchise locations opened and six franchise locations closed. During the third quarter fiscal 2025, three franchise locations opened and ten franchise locations closed.
Current report — wording carried from elsewhere
Inflationary pressures on labor and rising commodity prices, most notably for beef and beef trimmings, have impacted our consolidated results of operations during the fiscal 2026 period, and this trend may continue through the remainder of fiscal year 2026.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
In the second quarter fiscal 2025, the Company refinanced and redeemed its outstanding 2025 Notes. In connection with this transaction, the Company recorded a loss on extinguishment of debt of $334,000 that reflected the write-off of the remainder of previously recorded debt issuance costs.
Previous report — wording carried elsewhere
Additionally, effective November 6, 2025, the Board also declared a special cash dividend of $2.50 per share to stockholders of record as of the close of business on November 24, 2025 of approximately $10,224,000 payable on December 5, 2025.