Nathan's Famous (NATH) Q3 2026 earnings summary

Executive summary

• Revenues for the quarter ended December 28, 2025, increased 9% year-over-year to $34.3M, but net income declined to $3.1M from $4.5M, with diluted EPS of $0.75 compared to $1.10.

• For the nine-month period, revenues increased to $127.0M from $117.4M, while net income fell to $17.2M from $19.8M year-over-year.

• The company entered into a definitive Merger Agreement with Smithfield Foods, Inc., under which shareholders will receive $102.00 per share in cash, valuing the company at $450M; it will become a wholly owned subsidiary and cease to be publicly traded.

Financial highlights

• Adjusted EBITDA for the quarter was $6.0M, down from $7.5M; for the nine months, $27.8M versus $32.1M.

• Earnings per diluted share for the quarter were $0.75, down from $1.10; for the nine months, $4.17 versus $4.84.

• Income from operations for the quarter was $5.1M, down from $6.8M; for the nine months, $25.4M versus $30.1M.

• Cash and cash equivalents at period end were $24.5M, with net working capital of $27.8M.

• Gross profit margin declined to 10% from 15% due to higher commodity costs, especially beef and beef trimmings.

Outlook and guidance

• Inflationary pressures on beef and labor are expected to persist, impacting margins for the remainder of fiscal 2026.

• The merger with Smithfield Foods is expected to close in the first half of 2026, pending regulatory and shareholder approvals.

• Management expects to fund operations, debt service, dividends, and potential share repurchases from operating cash flow.

• The company projects continued volatility in commodity and labor costs, with the ability to offset some increases through pricing actions.