Core Insights - Denny's reported mixed results for Q2 FY2025, with earnings per share (Non-GAAP) at $0.09, missing the estimate of $0.11, and revenue at $117.7 million, slightly below the target of $118.09 million but up from $115.9 million in Q2 2024 [1][2] Financial Performance - Same-restaurant sales for Denny's dropped by 1.3% in Q2 FY2025, while Keke's saw an increase of 4.0% [5] - Adjusted EBITDA was $18.8 million, down 6.0% from $20.0 million in the previous year [2] - Adjusted franchise operating margin decreased to $30.0 million (50.7%) from $30.8 million (50.0%) year-over-year [2][6] - Adjusted company restaurant operating margin fell to $6.7 million (11.5%) from $6.9 million (12.7%) in the prior year [2][6] Business Overview - Denny's operates primarily as a franchise-driven model, with over 96% of locations operated by franchisees [3] - The company focuses on all-day breakfast and value offerings, maintaining strong brand recognition through menu innovation and digital engagement [4] Operational Strategy - Denny's closed ten locations and opened three during the quarter, aiming to strengthen system health by closing lower-volume stores [5] - Keke's opened eight new cafes and expanded outside its core Florida market, contributing to overall sales growth [5] Cost Management - General and administrative expenses were $21.4 million, showing only a modest increase from the prior year, with pure administration costs down by 3.5% [7] - Rising ingredient costs, particularly for eggs, significantly impacted profitability, with egg prices remaining about twice as high as previous periods [6] Future Guidance - Management projects same-restaurant sales for FY2025 to range from -2.0% to 1.0%, with plans for 25 to 40 new restaurant openings and 70 to 90 closures [11] - Commodity inflation is expected to be between 3.0% and 5.0%, while labor costs are projected to grow by 2.5% to 3.5% [11] - Adjusted EBITDA is forecasted to be between $80 million and $85 million [11]