NATHANS FAMOUS, INC. (NATH)

Nathan's Famous, Inc. is a branded licensor, wholesaler and retailer of products sold under the Nathan's Famous brand, led by Nathan's World Famous Beef Hot Dogs. The business began as a nickel hot dog stand on Coney Island in 1916. Its model aims to maximize the points of distribution and consumption of its hot dogs, crinkle-cut French fries and other products across grocery retail and foodservice formats. On January 20, 2026, the company agreed to merge with Smithfield Foods, Inc., which would make Nathan's a wholly owned subsidiary and end its public trading. Closing depends on approval by holders of a majority of its stock and CFIUS clearance, and is now expected in the second half of 2026.

Revenue comes from several programs. The licensing program has third parties manufacture, distribute and sell Nathan's branded hot dogs, frozen crinkle-cut fries and other products through supermarkets, grocery channels and club stores, with Smithfield Foods and Lamb Weston among the licensees. Licensing produced about $37.4 million of revenue in both fiscal 2026 and 2025. The Branded Product Program sells hot dogs and specialty products to foodservice operators, directly or through distributors, and contributed $105.8 million in fiscal 2026 versus $91.8 million in fiscal 2025. Franchise operations, including the Branded Menu Program (BMP) and virtual kitchens, earn royalties and contributed $4.3 million. Company-owned restaurants contributed $12.5 million. The company also owns the Arthur Treacher's Fish & Chips brand, used as a seafood co-brand in 28 Nathan's restaurants, in five BMP locations and on delivery platforms. Standard franchise terms include a $30,000 fee, a 5.5% royalty on restaurant sales and up to 2.5% of sales spent on advertising, with a typical initial term of 10 years.

Packaged hot dogs are sold in supermarkets, mass merchandisers and club stores in all 50 states, including Walmart, Kroger, Ahold, Publix, Albertsons, Safeway, ShopRite, Target, Costco and BJ's Wholesale Club. Foodservice customers include gas stations, movie theaters, amusement parks, sporting venues, airports, travel plazas and similar captive markets. At March 29, 2026, the franchise system had 221 locations in 19 states and 11 foreign countries, plus 476 virtual kitchens in 41 states and 3 foreign countries. Franchisees include Applegreen USA Welcome Centers, HMS Host, Areas USA, National Amusements, Hershey Entertainment & Resorts, Compass Group and Bruster's Real Ice Cream. No franchisee exceeded 10% of revenue. Products are marketed in twenty foreign countries, and the Branded Product Program distributes in all 50 states, the District of Columbia, Puerto Rico, Canada, the U.S. Virgin Islands, Guam and Mexico. The company operated four Company-owned restaurants in the New York metropolitan area, including the Coney Island flagship and one seasonal unit. The flagship hosts the Nathan's Famous International Hot Dog Eating Contest, broadcast on ESPN each July 4th since 2004.

Nathan's licenses manufacturing of its hot dogs in Brazil, Germany, Egypt and the United Arab Emirates, and relies on approved distributors for BMP and foodservice sales. Beef and beef trimmings are its main commodity exposure, and the average cost of its hot dogs rose about 19% in fiscal 2026. Company-owned restaurants also face labor inflation and New York minimum wage increases. The company says it competes on brand recognition and premium pricing. It was incorporated in Delaware in 1992 as successor to a business dating to the original 1916 Coney Island restaurant, and its fiscal year ends on the last Sunday in March.