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Nathan’s Famous Soars as Hot Dog Interest Wanes

As the July 4 holiday nears, grillers will head to the grocery story to buy hamburgers and hot dogs this week but the hot dog’s days as an American food staple might be in jeopardy. Bloomberg reports that Americans will eat 150 million hot dogs this year but those numbers are declining. Hot dog consumption fell 3 percent year over year in 2012 and this year’s estimates signal another decline.

But why can’t the hot dog find any love? Some say it’s because of the declining birth rate (Children consume more hot dogs than adults) while others say it’s the price of beef and the expanding offerings of junk food in the United States.

But don’t ask Nathan’s Famous (NASDAQ: NATH) about the decline in hot dog sales. It posted a year over year EPS gain of 46 percent in its recently announced quarterly earnings statement. It also increased gross margins 520 basis points. The stock is up 53 percent this year and nearly 200 percent over the past 2 years.

Nathan’s started the now-famous July 4 hot dog eating contest that is televised on ESPN and brings competitors to New York from around the world.

But don’t worry about the fate of the hot dog just yet. Grills around the nation will have wieners for the family grill-out but how long this holiday favorite lasts, is on the minds of all hot producers.

Disclosure: At the time of this writing, the author had no position in the equities mentioned.

[stock-tools exchange="NASDAQ" symbol="NATH" image_height="230" image_width="350"]


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