Loading...
01/11 16:03
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects mixed signals: positive adjusted EBITDA growth, increased average guest check, and a share repurchase plan are offset by declining revenues, restaurant closures, and economic uncertainties. Management's vague responses in the Q&A add to investor concerns. Despite optimistic guidance, the lack of clarity on macro factors and franchise issues tempers enthusiasm, likely resulting in a neutral stock price movement.
Total Operating Revenue $114,700,000 (decreased from $115,400,000, a change of -0.6% year-over-year) due to the refranchising of three Denny's company restaurants and the strategic closure of lower volume restaurants.
Adjusted Franchise Operating Margin $31,900,000 (51.2% of franchise and license revenue, compared to $31,500,000 or 51.4% for the prior year quarter, a decrease of 0.2 percentage points) due to positive franchise same restaurant sales at both brands, partially offset by restaurant closures.
Adjusted Company Restaurant Operating Margin $5,900,000 (11.3% of company restaurant sales, compared to $6,100,000 or 11.4% for the prior year quarter, a decrease of 0.1 percentage points) primarily due to investments in marketing and inefficiencies from new Kiki's Cafe openings, partially offset by lower legal settlement expenses.
Adjusted EBITDA $22,200,000 (increased 11.1% year-over-year) contributing to the strongest quarter of adjusted EBITDA during 2024.
Average Guest Check Increased approximately 6.5% compared to the prior year quarter, attributed to a categorization change in the $2 and $4 categories on the value menu.
Same Restaurant Sales (Denny's) Positive 1.1% for the quarter, outperforming the BBI Family Dining Index for the fourth consecutive quarter.
Same Restaurant Sales (Kiki's) Positive 3% for the quarter, impacted by approximately 110 basis points due to hurricanes Helene and Milton.
Number of Franchise Restaurants Opened 4 franchise restaurants opened during the quarter, totaling 14 for the full year.
Number of Restaurants Closed 30 restaurants closed during the fourth quarter and 88 for the full year, with an average unit volume of slightly under $1,100,000.
Commodity Inflation Approximately 3% during the quarter, driven by increases in pork, orange juice, and eggs.
Labor Inflation Approximately 3% during the quarter.
General and Administrative Expenses $18,700,000 (decreased from $19,300,000 for the prior year quarter) primarily due to lower deferred compensation valuation adjustments and corporate administrative expenses.
Effective Income Tax Rate 33.8% (decreased from 36.9% for the prior year quarter) primarily due to discrete items relating to share-based compensation.
Total Debt Outstanding Approximately $272,000,000, including approximately $261,000,000 borrowed under the credit facility.
New Product Launches: Denny's launched the 02/1968 Value Play, a consumer-friendly traffic-driving platform that has been well-received by guests.
Virtual Brand Expansion: Denny's expanded its virtual brand, Banda Burrito, nationally, contributing significantly to same restaurant sales growth.
Digital Enhancements: Investments in digital enhancements improved guest experience and increased website traffic and conversion rates.
Remodel Program: Denny's reignited its Diner 2.0 remodel program, completing six remodels in Q4, with a 6.5% lift in traffic observed.
Market Expansion: Kiki's Breakfast Cafe opened eight new cafes in Q4, expanding its footprint to six states.
Franchise Agreements: Denny's terminated two Kiki's franchise agreements impacting 11 cafes, with plans to maintain oversight and efficiency.
Operational Efficiencies: Denny's closed 30 lower volume restaurants in Q4 to improve franchisee cash flow and reinvest in traffic-driving initiatives.
Sales Performance: Denny's reported a 1.1% increase in same restaurant sales for Q4, outperforming the BBI Family Dining Index.
Strategic Focus: Denny's is focusing on value leadership and leveraging its strengths in breakfast offerings to drive traffic.
Long-term Goals: Denny's aims to achieve 2,200,000 system AUVs through strategic initiatives and brand strengths.
Consumer Sentiment Shift: There has been a decline in system-wide same restaurant sales due to evolving consumer sentiment driven by macro events, leading to a conservative guidance for 2025.
Weather Impact: Sales trends were negatively impacted by weather conditions, particularly in the Midwest and Mid Atlantic regions.
Hurricane Impact on Kiki's: Kiki's same restaurant sales were affected by hurricanes Helene and Milton, which impacted operations in Florida.
Restaurant Closures: Denny's plans to close between 70 and 90 lower volume restaurants to improve franchisee cash flow and allow reinvestment into traffic-driving initiatives.
Commodity Inflation: Projected commodity inflation for 2025 is between 2% and 4%, which may affect overall costs.
Labor Inflation: Labor inflation at company restaurants is expected to be between 2.5% and 3.5%, impacting operational costs.
Franchisee Financial Health: The cancellation of two franchise agreements was due to the financial health of the franchisees, leading to the closure of lower-performing cafes.
Economic Uncertainty: General economic uncertainty, including inflation and changing consumer behaviors, poses risks to sales performance.
Key Initiatives for Denny's: Denny's launched the 02/1968 Value Play, expanded the virtual brand Banda Burrito, and enhanced digital presence and guest experience.
Diner 2.0 Remodel Program: Completed six remodels in Q4 2024, totaling 23 for the year, with a 6.5% lift in traffic in remodeled restaurants.
Kiki's Growth Strategy: Kiki's Breakfast Cafe had a record-breaking year with over 140 development commitments and a focus on expanding its off-premise business.
Virtual Brands Performance: Denny's virtual brands contributed significantly to same restaurant sales growth, with less than 1% overlap with dining room guests.
2025 Same Restaurant Sales Guidance: Expecting domestic system wide same restaurant sales between -2% and +1% for 2025.
2025 Restaurant Openings: Anticipating 25 to 40 new restaurant openings, split between Denny's and Kiki's.
Restaurant Closures: Planning to close 70 to 90 lower volume Denny's restaurants to improve franchisee cash flow.
2025 Commodity Inflation: Projected commodity inflation of 2-4% and labor inflation of 2.5-3.5%.
2025 Adjusted EBITDA Guidance: Expecting consolidated adjusted EBITDA between $80 million and $85 million.
Share Repurchase Plan: Planning to deploy $15 million to $25 million towards share repurchases.
Share Repurchase Program: Denny's plans to deploy between $15,000,000 and $25,000,000 towards share repurchases in 2025, which includes proceeds from the anticipated sale of one to two Kiki's markets.
The earnings call presents a mixed picture: positive developments like promotions and increased AUV are offset by challenges such as declining margins and volatile same-store sales. The Q&A reveals management's optimism about future strategies, but also highlights macroeconomic pressures and vague responses on key metrics. Given the absence of strong catalysts and a cautious guidance outlook, the stock price is likely to remain stable in the near term, leading to a neutral sentiment.
The earnings call summary presents a mixed picture. Basic financial performance shows slight revenue growth but declining margins, resulting in a neutral rating. Product development and market strategy appear positive, with successful value strategies and market share gains. However, guidance is weak, with only flat to slightly negative sales expectations for 2025. Expenses are managed well, but financial health is concerning with high debt and declining margins. Shareholder returns are positive due to the repurchase plan. Overall, the sentiment is neutral, with no strong catalysts for significant stock price movement.
The earnings call presents a mixed outlook. Strong performance in Kiki's sales and a successful promotional strategy are positives, but declining margins and increased costs, particularly in operating and product expenses, are concerning. The company plans to close underperforming restaurants to enhance cash flow, which might be beneficial long-term but signals current operational challenges. The Q&A section reveals cautious optimism but also highlights management's reluctance to provide clear guidance on certain issues. Given these factors, the stock price is likely to remain stable, resulting in a neutral sentiment rating.
The earnings call reflects mixed signals: positive adjusted EBITDA growth, increased average guest check, and a share repurchase plan are offset by declining revenues, restaurant closures, and economic uncertainties. Management's vague responses in the Q&A add to investor concerns. Despite optimistic guidance, the lack of clarity on macro factors and franchise issues tempers enthusiasm, likely resulting in a neutral stock price movement.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
