Denny's Q4 2024: Conflicting Signals on Sales Recovery, Marketing Strategy, and Keke's Performance

These are the key contradictions discussed in Denny's latest 2024Q4 earnings call, specifically including: Confidence in Sales Recovery and Marketing Strategy, and Keke's Performance and Strategic Initiatives:



Strong Fourth Quarter Performance and Sales Growth:
- Denny's reported domestic system-wide same-restaurant sales of positive 1.1% for the fourth quarter, outperforming the BBI Family Dining Sales Index for the fourth consecutive quarter.
- Keke's Breakfast Cafe saw same-restaurant sales of positive 3%, also outperforming the BBI Family Dining Sales Index in Florida for the second consecutive quarter.
- The positive results were driven by consumer stabilization, increased digital enhancements, and effective initiatives like the $2 $4 $6 $8 Value Menu and the expansion of virtual brands.

Consumer Sentiment Shift and Sales Decline:
- In the first 6 fiscal weeks of 2025, Denny's experienced a negative 0.7% decline in domestic system-wide same-restaurant sales in fiscal January.
- Trends shifted in the first two fiscal weeks of February, with sales down approximately 5%.
- The decline was attributed to evolving macroeconomic conditions, including inflation and consumer uncertainty.

Focus on Remodels and Value Leadership:
- Denny's completed 23 remodels during 2024, resulting in a 6.5% sales lift in remodeled restaurants.
- The company emphasized its value leadership strategy, with a focus on loyalty and digital enhancements.
- The strategic focus on remodels and value-centric initiatives was aimed at restoring momentum and enhancing guest experience.

Keke's Brand Expansion and Growth:
- Keke's opened 8 new cafes during the fourth quarter and 12 for the full year, expanding into six different states.
- Although Keke's experienced a 110 basis points impact related to hurricanes, same-restaurant sales were positive 3%.
- Growth was supported by new marketing investments, beverage program rollouts, and expansion of its off-premise business model.