Denny's Q4 2024 Preliminary Results Show Mixed Performance

Denny's preliminary results indicate mixed trends in same-restaurant sales. While some areas saw slight improvements, declines in others raise concerns. The stock experienced minor fluctuations during trading hours. Investors should stay informed for the upcoming earnings release.

Date: 15-01-2025

AI Rating: 5

Revenue Growth
Denny's Corporation reported expected domestic system-wide same-restaurant sales growth of 1.1% for Q4 fiscal 2024, slightly up from the previous quarter but down from 1.3% a year ago. Keke's brand showed expected same-restaurant sales growth of 3%, which is an improvement from the previous year's decline of 3.1%, indicating strong sales performance in some segments.

Same-Restaurant Sales Performance
For the fiscal year, Denny's same-restaurant sales are expected to decline by 0.2%, significantly lower than the 3.6% growth reported in fiscal 2023. However, Keke's system-wide sales are expected to show a minor improvement in decline, thus demonstrating a resilience that could indicate a positive trajectory going forward.

Average Unit Sales
The report also highlights that the average unit sales value is showing positive growth in both Denny’s and Keke’s brands with increases in expected sales values. This upward trend may suggest a gradual improvement in operational performance along with pricing strategies.

Stock Performance & Outlook
Denny's recent stock movements, including a 0.2% increase in daily trading followed by a 2.1% loss in after-hours trading, reflect market uncertainty regarding its performance. Furthermore, the reported expected adjusted EBITDA guidance between $81 million and $84 million at the low end, along with substantial borrowings under its credit facility, raises some caution for investors. The ongoing efforts to drive traffic through innovations and expansions may offset these concerns if executed effectively.

Earnings Per Share
The EPS estimate for fiscal 2025 remains unchanged at 58 cents, reflecting an 11.5% growth from the previous year, signalling potential investor confidence amidst mixed results. A Zacks Rank of #2 (Buy) illustrates some analyst optimism for the stock moving forward.

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