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 Q1 2025 Performance - Denny's domestic system-wide same-restaurant sales decreased by 30%[9] - Keke's domestic system-wide same-restaurant sales increased by 39%[12] - Denny's Q1 2025 domestic average weekly sales were approximately $36500[17] - Denny's off-premises sales accounted for 22% of total sales in Q1 2025[9] - Keke's off-premises sales accounted for approximately 16% of total sales in Q1 2025[12] Denny's and Keke's Expansion and Remodeling - Denny's opened 6 new franchised restaurants and completed 6 remodels in Q1 2025[9] - Keke's opened 3 new cafes and expanded to its 7th state, Georgia, in Q1 2025[12] - Denny's Diner 20 remodel program showed a sales lift of 64% during testing[22] - Keke's remodel program targets a sales lift of $150000+ and a target IRR of ~25%+[45] Financial Position - Denny's allocated over $713 million towards share repurchases since the program began in late 2010[54] - Denny's long-term debt leverage target is 25x – 35x[54]

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]

DENNY'S CORPORATION REPORTS RESULTS FOR FIRST QUARTER 2025 SPARTANBURG, S.C., May 5, 2025 - Denny's Corporation (the "Company") (NASDAQ: DENN), owner and operator of Denny's Inc. ("Denny's") and Keke's Inc. ("Keke's") today reported results for its first quarter ended March 26, 2025 and provided a business update on the Company's operations. Franchise and license revenue was $57.7 million compared to $57.6 million for the prior year quarter. This increase was primarily driven by higher local advertising co- ...