Nathan’s Famous, Inc. reported second‑quarter 2026 results for the 13‑week period ending September 28, 2025, showing revenue of $45.7 million, a 11.1% year‑over‑year increase from $41.1 million. Net income fell to $5.2 million from $6.0 million, and diluted earnings per share dropped to $1.26 from $1.47. Income from operations declined to $7.5 million versus $9.6 million, and adjusted EBITDA slipped to $8.3 million from $10.4 million.
The revenue rise was driven primarily by the Branded Products segment, which grew 18% to $29.0 million thanks to higher hot‑dog volume and an average selling‑price lift. Company‑owned restaurant sales increased 5% to $5.6 million, while licensing royalties fell 3% to $9.2 million, reflecting a 18% drop in retail volume but partially offset by higher pricing.
Margin compression was largely a result of a 24% jump in the cost of sales, driven by a 20% increase in the average hot‑dog cost per pound as beef prices rose. The higher commodity cost eroded income from operations and adjusted EBITDA, outweighing the revenue gains and leading to a 1.2‑point decline in operating margin.
Diluted EPS fell by $0.21, a 14% decline, because the margin squeeze from higher beef costs was not fully offset by the revenue growth. The company did not report any significant one‑time charges or gains that could have mitigated the earnings dip, so the EPS miss reflects the direct impact of commodity inflation on profitability.
The Board declared a regular quarterly cash dividend of $0.50 per share and a special dividend of $2.50 per share, both payable on December 5, 2025, underscoring confidence in cash‑flow generation despite the margin pressure.
Management emphasized continued focus on cost discipline and pricing strategy to navigate the rising commodity environment. The company highlighted its ability to pass some of the beef‑price increase to consumers through higher selling prices, while maintaining demand in the Branded Products line. The dividend declaration signals a commitment to returning capital to shareholders while sustaining operational resilience.
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