Financial Data and Key Metrics Changes - Denny's reported system-wide same restaurant sales of negative 1.3% for Q2 2025, reflecting a sequential improvement of approximately 170 basis points from Q1 2025 [6][24] - Total operating revenue increased to $117.7 million compared to $115.9 million for the prior year quarter, driven by the addition of Kiki's company cafes [32] - Adjusted net income per share was $0.09 for the current year quarter, with total debt outstanding at approximately $279 million [35][36] Business Line Data and Key Metrics Changes - Denny's company restaurants delivered flat same restaurant sales for Q2 2025, while Kiki's Breakfast Cafe achieved positive same restaurant sales of 4% compared to the prior year quarter [25][29] - Off-premise sales contributed a 1.5% improvement in same restaurant sales during Q2, representing 21% of total sales [11][27] - Kiki's opened eight new cafes during the quarter, including two previously closed locations, and has a strong average check increase of approximately 6% [18][29] Market Data and Key Metrics Changes - The top four DMAs (Los Angeles, San Francisco, Houston, and Phoenix) represented nearly 30% of Denny's comp sales base but faced macroeconomic pressures that negatively impacted sales [7] - The 50,000 to 70,000 income cohort showed the biggest improvement in sales, indicating a shift in spending patterns [25][46] Company Strategy and Development Direction - Denny's is focused on driving profitable traffic through value messaging and innovative promotions, such as the buy one, get one slam for a dollar deal [8][9] - The company is implementing a new points-based loyalty program aimed at enhancing customer engagement and driving repeat visits [12][23] - A strategic plan to close underperforming restaurants is underway, with the goal of returning to net flat to positive growth by 2026 [13][37] Management's Comments on Operating Environment and Future Outlook - Management noted a choppy consumer environment with household incomes under pressure and volatile consumer sentiment, but expressed confidence in the company's ability to navigate these challenges [6][22] - There is optimism regarding the stabilization of the macro environment, which is expected to support the company's initiatives [22][78] Other Important Information - Denny's completed 14 remodels during the quarter, with plans for additional remodels in both company and franchise locations [28] - The company is on track to achieve its adjusted EBITDA guidance of $80 million to $85 million for the year [36] Q&A Session Summary Question: What does July same store sales look like? - Management indicated that July has been volatile, but they are optimistic about achieving the lower end of the same store sales guidance due to upcoming value messaging and remodels [41][43] Question: Why did the 50,000 to 70,000 income cohort see the biggest improvement? - Management attributed this to effective promotions like the BOGO deal, which attracted new and lapsed users [46][48] Question: How is the value mix structured? - Management clarified that everyday value and limited-time offers (LTOs) are both important, with a focus on maintaining a balance between the two [53][56] Question: Can the BOGO promotion return? - Management stated that while the BOGO promotion was successful, it was refreshed for summer with new offerings, but it could return in the future depending on market conditions [92][95] Question: What is the status of the new loyalty program? - The new loyalty program is set to launch in the back half of the year, transitioning to a one-to-one marketing approach to better engage customers [86][88]