High beef costs cut Nathan's profits

The high cost of beef has put a drag on quarterly profits for Nathan's Famous Inc., even with the growth of its international chain of hot-dog restaurants, with new outlets in Kuwait, China, Canada and the Dominican Republic.

Nathan's, headquartered in Jericho, reported $1.59-million net income on $17.89 million in sales for the quarter ended June 26, compared to $1.66-million income on $15.62-million sales in the year-ago quarter.

"Gross profit was 18.7 percent of sales as compared to 23.2 percent of sales during the 13 weeks ended June 27, 2010, due primarily to unusually high beef costs," the company announced Wednesday.

Nathan's said its branded product program is doing well, with its sales of hot dogs to the food service industry. The program increased by 29.2 percent to $10.14 million during the quarter, compared to sales of $7.85 million in the prior year's quarter.

Retail license royalties increased 9.3 percent to $1.96 million during the quarter, compared to $1.79 million during the year-ago quarter.

Quarterly revenues from franchise operations increased by 14.3 percent, or $180,000, to $1.43 million, compared to $1.25 million in the prior-year quarter.

Fourteen new franchised units were opened during the quarter, Nathan's said.

It opened its first restaurant in Alberta, Canada; its third restaurant in Beijing; its fourth restaurant in the Dominican Republic; and its 15th restaurant in Kuwait.