Denny's Corporation Reports Results for Third Quarter 2025

Core Insights - Denny's Corporation reported a total operating revenue of $113.2 million for Q3 2025, an increase from $111.8 million in the same quarter last year, driven by additional Keke's units despite the closure of lower volume Denny's restaurants [4][9] - The company is focusing on strategic initiatives to enhance brand relevance, including a new loyalty program and digital presence, while Keke's continues to grow in the fast-casual segment [2][3] Financial Performance - Franchise and license revenue decreased to $55.9 million from $59.1 million year-over-year, attributed to fewer Denny's franchise units and softer same-restaurant sales [5][9] - Company restaurant sales increased to $57.4 million from $52.7 million, primarily due to the growth of Keke's units [5][9] - Adjusted franchise operating margin was $29.1 million, or 52.0% of franchise and license revenue, compared to $30.1 million, or 50.9% in the prior year [6][9] - Adjusted company restaurant operating margin improved to $7.8 million, or 13.5% of company restaurant sales, from $6.1 million, or 11.5% in the prior year [7][9] Operational Highlights - Denny's domestic system-wide same-restaurant sales decreased by 2.9%, while Keke's saw an increase of 1.1% [9] - The company opened one new Denny's franchised restaurant and completed 10 remodels, while Keke's opened four new cafes and completed three remodels [9] - Total general and administrative expenses rose to $22.6 million from $19.8 million, mainly due to increased incentive compensation and transaction costs [8][9] Debt and Capital Allocation - The company ended the quarter with total debt of $269.2 million, including $259.5 million under its credit facility [11][12] - Denny's invested $9.3 million in cash capital expenditures during the quarter, focusing on new cafe development and remodels [12] Business Outlook - Denny's Corporation announced a definitive agreement to be acquired by a group of investors, with the transaction expected to close in Q1 2026, subject to stockholder and regulatory approvals [13][14]