Core Insights - The article discusses the author's academic and professional background in Machine Learning, Economics, and Finance, highlighting affiliations with prestigious institutions and experience in financial advisory, particularly in banking and mergers & acquisitions [1]. Group 1 - The author holds a PhD in Machine Learning with a focus on Economics and Finance [1]. - The author has academic affiliations with IESE Business School, ESADE Business School, and the Barcelona Supercomputing Center [1]. - The professional experience includes working at Deloitte Financial Advisory, specializing in banking and mergers & acquisitions [1]. Group 2 - The author's interests include machine learning and generative AI applications in finance and economics [1]. - The author is proficient in programming languages such as Python, R, and SQL [1].

Core Insights - Denny's is launching a summer promotion offering 4 popular Slams for under $10 each, emphasizing value for families and individuals [1][2] - The promotion is part of a broader strategy to celebrate Denny's baseball history and cater to customers on-the-go [2] - Denny's is also engaging in charitable efforts by donating a portion of Kids Menu item sales to pediatric cancer research through a partnership with Cookies for Kids' Cancer [3] Promotion Details - The 4 Slams available for under $10 include the Red, White and Berry Everyday Value Slam, Choconana Everyday Value Slam, Super Slam, and Everyday Value Slam [6] - The promotion is available all day, every day for dine-in or to-go, reinforcing Denny's commitment to providing great food at a meaningful value [5] Special Offers - In conjunction with Father's Day, Denny's is offering limited-edition breakfast-themed PJs and a discount on online orders [4] - An online gift card promotion is also available, providing a $5 bonus coupon for every $25 gift card purchased [5] Company Overview - Denny's operates 1,491 restaurants globally, with 1,430 being franchised and licensed, and 61 company-operated [8] - The brand has a long-standing commitment to community support, including initiatives like the Mobile Relief Diner and partnerships with No Kid Hungry and Cookies for Kids' Cancer [7]

Core Insights - Denny's is launching new summer menu items including the Red, White & Berry Pancake Slam, Bacon Ranch Cheeseburger, Cookie Dough Lover's Pie, and Strawberry Sparkler beverage [1][4][5] - The company is extending its Buy One Slam, Get One for $1 promotion until June 8, allowing customers to enjoy two hearty breakfasts at a low cost [2][8] - Denny's is partnering with Cookies for Kids' Cancer, donating a portion of sales from the Kids Menu to support pediatric cancer research [7] Menu Highlights - The NEW Red, White & Berry Pancake Slam features buttermilk blueberry pancakes topped with strawberries, cream cheese icing, and whipped cream, served with eggs, hash browns, and a choice of bacon or sausage [3] - The NEW Bacon Ranch Cheeseburger includes a beef patty, Applewood-smoked bacon, ranch dressing, aged white cheddar, and is served with wavy-cut fries [4] - The NEW Cookie Dough Lover's Pie is a dessert made with chocolate chip cookie dough on a flaky crust, topped with vanilla ice cream and salted caramel [5] - The NEW Strawberry Sparkler is a refreshing drink made with a strawberry-lime blend and lemon-lime Sprite [4] Community Engagement - Denny's is committed to community support through initiatives like the Mobile Relief Diner and the Hungry for Education scholarship program [9] - The partnership with Cookies for Kids' Cancer aims to raise awareness and funds for pediatric cancer research, reflecting the company's dedication to social responsibility [7] Company Overview - Denny's operates 1,491 restaurants globally, with 1,430 being franchised and licensed, and 61 company-operated as of March 26, 2025 [10] - The brand has been in operation for over 70 years, focusing on providing value across various meal times [9]

Core Insights - Denny's has launched a new Summer-inspired menu featuring fresh dishes and value promotions to attract customers [1][10] - The restaurant is extending its popular "Buy One Slam, Get One for $1" offer until June 8, encouraging social dining experiences [2][3] Menu Highlights - New menu items include the Red, White & Berry Pancake Slam, Bacon Ranch Cheeseburger, Cookie Dough Lover's Pie, and Strawberry Sparkler beverage [1][4][5] - The Red, White & Berry Pancake Slam features buttermilk blueberry pancakes topped with strawberries and served with eggs, hash browns, and bacon or sausage [3] - The Bacon Ranch Cheeseburger includes a beef patty, Applewood-smoked bacon, ranch dressing, and is served with wavy-cut fries [4] - The Cookie Dough Lover's Pie is a dessert made with chocolate chip cookie dough on a pie crust, topped with vanilla ice cream and caramel drizzle [5] Community Engagement - Denny's has partnered with Cookies for Kids' Cancer, donating a portion of sales from the Kids Menu to support pediatric cancer research [7][11] - The partnership aims to raise awareness and funds for safer treatments for children battling cancer [11] Promotional Offers - Denny's is running a gift card promotion where customers receive a $5 bonus coupon for every $25 gift card purchased, valid through June 18 [11] - The "Buy One Slam, Get One for $1" promotion is available for dine-in customers, enhancing the value proposition for guests [2][12] Company Overview - Denny's operates over 1,491 restaurants globally, with a significant number being franchised [14] - The company emphasizes community support through various initiatives, including disaster relief and educational scholarships [12]

Core Insights - Denny's reported revenue of $111.64 million for the quarter ended March 2025, reflecting a 1.5% increase year-over-year and a surprise of +1.56% over the Zacks Consensus Estimate of $109.92 million [1] - The company's EPS was $0.08, down from $0.11 in the same quarter last year, aligning with the consensus EPS estimate [1] Financial Performance Metrics - Same-Restaurant Sales for Domestic Franchise Restaurants decreased by -3.2%, worse than the average estimate of -2.6% [4] - Total number of restaurants at the end of the period was 1,557, exceeding the average estimate of 1,551 [4] - Franchised and licensed restaurants at the end of the period totaled 1,475, slightly above the average estimate of 1,472 [4] - Same-Restaurant Sales for Company Restaurants fell by -0.9%, compared to the average estimate of -0.2% [4] - Company-operated restaurants at the end of the period numbered 82, surpassing the average estimate of 79 [4] - System-wide Same-Restaurant Sales decreased by -3%, compared to the average estimate of -2.2% [4] Revenue Breakdown - Franchise and license revenue was reported at $57.74 million, exceeding the average estimate of $56.99 million, with a year-over-year change of +0.2% [4] - Company restaurant sales revenue reached $53.90 million, higher than the average estimate of $52.92 million, representing a +3% change year-over-year [4] - Advertising revenue from franchise and license revenue was $19.07 million, above the average estimate of $18.78 million, with a +5.2% year-over-year change [4] - Initial and other fees from franchise and license revenue were $2.87 million, significantly higher than the average estimate of $2.40 million, reflecting a +58.3% year-over-year increase [4] - Occupancy revenue from franchise and license revenue was $7.95 million, slightly above the average estimate of $7.81 million, but down -5% year-over-year [4] - Royalties from franchise and license revenue were $27.84 million, below the average estimate of $28.44 million, with a year-over-year change of -5% [4] Stock Performance - Denny's shares have returned +10.5% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Denny's reported quarterly earnings of $0.08 per share, matching the Zacks Consensus Estimate, but down from $0.11 per share a year ago [1] - The company posted revenues of $111.64 million, exceeding the Zacks Consensus Estimate by 1.56%, and up from $109.97 million year-over-year [2] Financial Performance - Earnings per share (EPS) for the last quarter was $0.08, compared to an expected $0.15, with a surprise of -6.67% as the actual earnings were $0.14 a quarter ago [1] - Over the last four quarters, Denny's has not surpassed consensus EPS estimates [1] - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $116.8 million, and for the current fiscal year, it is $0.50 on revenues of $469.46 million [7] Stock Performance - Denny's shares have declined approximately 37.4% since the beginning of the year, contrasting with the S&P 500's decline of -3.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Retail - Restaurants industry, to which Denny's belongs, is currently in the bottom 21% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Denny's stock performance [5]

Financial Data and Key Metrics Changes - Denny's reported Q1 domestic system-wide same restaurant sales decreased by 3% [18] - Domestic franchise restaurants had same restaurant sales of negative 3.2%, while company same restaurant sales were negative 0.9% [19] - Total operating revenue was $111.6 million compared to $110 million for the prior year quarter [25] - Adjusted net income per share was $0.08 in the current year quarter [31] Business Line Data and Key Metrics Changes - Kiki's Breakfast Cafe achieved same restaurant sales growth of 3.9% for the quarter, outperforming the BBI Family Dining Index in Florida by nearly 400 basis points [13][22] - Denny's off-premise sales contributed a 1% improvement in same restaurant sales during Q1, representing approximately 22% of total sales [20] - Kiki's average check increased by approximately 6.5% during the first quarter, driven by pricing and off-premise growth [23] Market Data and Key Metrics Changes - California and Florida were the strongest markets for Denny's, with California outperforming BBI family dining sales for the fifth consecutive quarter [18] - Consumer sentiment remains negative, impacting spending, particularly among households earning less than $50,000 [19][7] Company Strategy and Development Direction - Denny's is focusing on value-driven initiatives and promotional offers to attract customers, such as the "Buy One Slam, Get One for $1" deal [9][21] - The company is also investing in digital enhancements and remodel programs to improve guest experience and drive sales [17][35] - Kiki's is expanding beyond Florida, with plans for 12 to 20 new openings this year [24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second quarter, noting improvements in sales trends and consumer sentiment [32][54] - The company anticipates being in the lower half of its same restaurant sales guidance range for the year of negative 2% to positive 1% [33] - Management highlighted the importance of monitoring consumer behavior and adjusting strategies accordingly [40][56] Other Important Information - Denny's completed six remodels during the quarter, with over 50% of the company fleet remodeled under the new image [21] - The company is facing commodity inflation, particularly in egg prices, which significantly impacted margins [27][28] Q&A Session Summary Question: How is the new promotional strategy shaping the outlook for the rest of the year? - Management is pleased with the results of the promotional strategy and will continue to refine their everyday value offerings while monitoring consumer needs [39][40] Question: Are there signs of improvement in consumer sentiment across different cohorts? - Management noted that all income cohorts improved in April, particularly those earning above $60,000 [55] Question: What is the franchisee appetite for promotions like the BOGO offer? - Franchisees are pleased with the traffic driven by the BOGO offer, and management is monitoring its impact on margins [61][58] Question: What is the forward outlook for menu pricing? - The company expects approximately 4% to 4.5% of pricing to be implemented in 2025, with a cautious approach to future pricing adjustments [67] Question: How is the company managing inefficiencies from new cafe openings? - Management indicated that inefficiencies are expected in the first six months of new cafe openings, but they aim to improve operational efficiency over time [101] Question: What is the impact of egg prices on margins? - Egg prices have significantly impacted margins, but management expects the situation to improve as prices stabilize [104]

Financial Performance - Total operating revenue for the quarter ended March 26, 2025, was $111.637 million, a 1.5% increase from $109.974 million in the prior year period[79] - Net income for the quarter ended March 26, 2025, was $326,000, a significant decrease from $4.691 million in the prior year period[79] - Company same-restaurant sales decreased by 0.9% compared to the prior year, while domestic franchise same-restaurant sales decreased by 3.2%[81] - Operating income was $5.2 million for the current quarter, down from $10.0 million in the prior year period[99] Revenue Breakdown - Company restaurant sales increased by $1.6 million, or 3.0%, for the quarter ended March 26, 2025, primarily due to an increase of 11 Keke's equivalent units[85] - Franchise and license revenue for the quarter ended March 26, 2025, was $57.737 million, a slight increase of 0.2% from $57.632 million in the prior year[89] - Royalties decreased by $1.5 million, or 5.0%, primarily due to a 3.2% decrease in Denny's domestic franchise same-restaurant sales[89] - Initial and other fees increased by $1.1 million, or 58.3%, primarily due to the collection of a $0.6 million early franchise termination fee[91] Cost Analysis - Total costs of company restaurant sales as a percentage of company restaurant sales were 92.8% for the quarter ended March 26, 2025, compared to 91.9% for the prior year[85] - Occupancy costs as a percentage of company restaurant sales increased to 9.4% for the quarter ended March 26, 2025, from 8.7% in the prior year[87] - Franchise and license revenue costs increased by $1.0 million, or 3.6%, resulting in costs representing 49.1% of franchise and license revenue for the quarter ended March 26, 2025, up from 47.5% in the prior year[92] - General and administrative expenses decreased by $1.2 million to $20.0 million for the quarter ended March 26, 2025, primarily due to a $1.0 million decrease in deferred compensation valuation adjustments[94] - Total depreciation and amortization expense increased to $4.1 million for the quarter ended March 26, 2025, primarily due to new Keke's units[95] Cash Flow and Investments - Net cash provided by operating activities was $5.0 million for the quarter ended March 26, 2025, compared to $0.2 million for the same period last year[105] - Net cash flows used in investing activities were $7.2 million for the quarter ended March 26, 2025, including capital expenditures of $9.1 million[106] - The company recorded impairment charges of $3.2 million during the quarter, primarily related to closed franchise restaurants[97] - The company is investing approximately $4 million in a new cloud-based restaurant technology platform, with rollout expected to continue through 2026[114] Debt and Taxation - As of March 26, 2025, the company had outstanding revolver loans of $266.0 million and outstanding letters of credit of $16.1 million under its credit facility[111] - The effective tax rate for the quarter was 47.4%, compared to 24.6% for the prior year period, with an expected fiscal year effective tax rate between 22% and 26%[101] - As of March 26, 2025, the company's ratio of fixed rate debt increased from 4% to 89% of total debt due to swaps[119] - A hypothetical change of 100 basis points in interest rates would result in a $0.2 million change in annual cash flow and income before taxes[119] Market Risks - There have been no material changes in quantitative and qualitative market risks since the prior reporting period, except for fluctuations in the fair values of interest rate swaps[120] Company Overview - The Denny's brand consisted of 1,491 restaurants as of March 26, 2025, with 1,430 being franchised/licensed and 61 company-operated[76]

DENNY'S CORPORATION INVESTOR PRESENTATION MAY THROUGH JULY 2025 FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES The Company urges caution in considering its current trends and any outlook on earnings disclosed either in this presentation or in its press releases. In addition, certain matters discussed in either this presentation or related press releases may constitute forward- looking statements. These forward-looking statements, which reflect management's best judgment based on factors currentl ...

Financial Data and Key Metrics Changes - Denny's reported Q1 domestic system-wide same restaurant sales decreased by 3% compared to the previous year, with company same restaurant sales down by 0.9% and franchise same restaurant sales down by 3.2% [16][17] - Total operating revenue for the quarter was $111.6 million, up from $110 million in the prior year quarter, driven by additional Kiki's units and higher local advertising contributions [23] - Adjusted net income per share was $0.08, with an adjusted EBITDA of $16.8 million [30] Business Line Data and Key Metrics Changes - Denny's same restaurant sales decreased by 3% in Q1, but April saw same restaurant sales approximately flat due to the successful Buy One Slam, Get One for $1 promotion [6][7] - Kiki's Breakfast Cafe achieved a same restaurant sales increase of 3.9% in Q1, significantly outperforming the BBI Family Dining Index in Florida [12][20] - Off-premise sales contributed positively, improving same restaurant sales by 1% and representing 22% of total sales [18][11] Market Data and Key Metrics Changes - California and Florida were the strongest markets for Denny's, with California outperforming the BBI Family Dining Sales Index for the fifth consecutive quarter [16] - Consumer sentiment remains negative, particularly among lower-income households, impacting overall sales performance [6][17] Company Strategy and Development Direction - The company is focusing on value-driven initiatives and promotional offers to attract customers in a challenging economic environment [5][6] - Denny's is committed to expanding Kiki's Breakfast Cafe, with plans for 12 to 20 new openings this year, and has opened six new cafes year-to-date [22][12] - The company is also enhancing its digital presence and off-premise strategies to capture a broader audience [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second quarter, noting improvements in consumer sentiment and sales trends [31][50] - The company anticipates being in the lower half of its same restaurant sales guidance range for the year, projecting a range of negative 2% to positive 1% [31][32] - Management highlighted the importance of ongoing promotional strategies and value offerings to maintain customer engagement [39][41] Other Important Information - The company completed six remodels during the quarter, with over 50% of its company fleet remodeled under the new image [19] - Commodity costs, particularly for eggs, have significantly impacted margins, with expectations for prices to moderate in the coming months [25][27] Q&A Session Summary Question: How is the strategy of introducing new value offers shaping the outlook for the rest of the year? - Management indicated that the promotional value strategy is essential in the current environment, and they will continue to refine it while monitoring consumer needs [39][40] Question: Are there signs of improvement in consumer sentiment across different cohorts? - Management noted that all income cohorts showed improvement in April, particularly those earning above $60,000 [52] Question: What is the franchisee appetite for promotions like the BOGO offer? - Franchisees have responded positively to the BOGO promotion, which has driven traffic and improved overall sales [56][58] Question: What is the outlook for menu pricing and its impact on same-store sales? - The company expects approximately 4% to 4.5% of pricing to be implemented in 2025, with a cautious approach to future pricing adjustments based on market conditions [63][64] Question: How is the company managing the impact of new cafe openings on margins? - Management acknowledged that new cafes typically experience inefficiencies initially, but they are working to optimize operations over time [96][98] Question: What is the expected impact of egg prices on margins moving forward? - Management indicated that the worst impact from egg prices was seen in Q1, with expectations for moderation in the following quarters [100]