Industry News | November 7, 2016

Unfavorable Weather Slows Down Sales at Nathan's

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Nathan's Famous, Inc. reported results for the second quarter of its 2017 fiscal year that ended September 25.

Income from operations was $8,031,000, as compared to $8,426,000 during the 13 weeks ended September 27, 2015.

Net income was $2,507,000, as compared to $2,847,000 for the 13 weeks ended September 27, 2015.

Revenues were $28,013,000, as compared to $30,619,000 during the 13 weeks ended September 27, 2015.

For the 26 weeks ended September 25:

Income from operations increased by 5.1 percent to $16,855,000, as compared to $16,042,000 during the twenty-six weeks ended September 27, 2015.

Net income increased by 17.5 percent to $6,057,000, as compared to $5,157,000 for the 26 weeks ended September 27, 2015,

Revenues were $57,429,000, as compared to $61,273,000 during the 26 weeks ended September 27, 2015.

License royalties were $11,612,000 during the 26 weeks ended September 25 as compared to $11,792,000 during the twenty-six weeks ended September 27, 2015. During the 26 weeks ended September 25, total royalties earned under the John Morrell & Co., agreement were $10,714,000, as compared to $10,932,000 of royalties earned during the twenty-six weeks ended September 27, 2015. During this period, the volume of products sold increased by 6.9 percent; however, 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.

In the Branded Product Program, which features the sale of Nathan's hot dogs to the foodservice industry, sales were $31,481,000 during the 26 weeks ended September 25, as compared to sales of $33,595,000 during the 26 weeks ended September 27, 2015. Operating profits increased for the fiscal 2017 period by approximately $1.9 million over the fiscal 2016 period. During the period, the volume of products sold increased by 3.1 percent but our average selling price declined by approximately 9.2 percent due to the impact of lower beef markets on that portion of our business that is sold using formula pricing.

Sales from the company-operated restaurants were $11,458,000 during 26 weeks ended September 25, as compared to $12,842,000 during the 26 weeks ended September 27, 2015 driven primarily from lower sales at both Coney Island locations, due to unfavorable weather conditions during the fiscal 2017 period compared to the weather conditions during the fiscal 2016 period when the company achieved record sales at both of these locations.

Revenues from franchise operations were $2,664,000 during the 26 weeks ended September 25, as compared to $2,617,000 during the 26 ended September 27, 2015. Total franchise fee income was $262,000 during the 26 weeks ended September 25, as compared to $207,000 during the 26 weeks ended September 27, 2015, primarily due to higher international development fees. Twenty new franchised outlets opened during the 26 weeks ended September 25, including seven international locations, and 11 Branded Menu Program outlets. Twenty-three new franchised outlets opened, during the 26 weeks ended September 27, 2015, including seven international locations, and 11 Branded Menu Program outlets.

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.

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The reported results of the second quarter of Nathan’s Famous Inc. show a slowdown in the total business market. I agree with the statement that the unfavorable weather slows down sales at Nathan. The unfavorable weather affected all the business economy in that area.1942 tequila

It’s alarming to hear that the Nathan’s has a decline in their profit share in the second quarter of the fiscal year compared to first due to the prevailing unfavorable weather conditions. There had been steep decline in sales in the second quarter and would prevail if the conditions get worse. Best bride LA

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