- **BOGO Success**: Buy One Get One promotion drove 70% of transactions from new/lapsed customers, flattening April sales.
- **Egg Cost Impact**: Q1 margin hit $0.5M from 3-4x egg price surge; surcharges to end by Q2.
- **Keke's Growth**: 3.9% same-restaurant sales growth, 6 new cafes opened YTD, targeting 12-20 openings.
- **Cautious Guidance**: Q1 EBITDA $16.8M; expect lower half of sales guidance (-2% to +1%) and EBITDA in lower $80-85M range.

**【CEO Summary Section】**
- **Challenges and Recovery**: Q1 same-restaurant sales declined 3% due to macroeconomic pressures, but April sales improved to flat year-over-year. The BOGO (Buy One Get One) promotion drove transactions, with 70% of sales coming from lapsed or new customers.
- **Value Strategy**: Launched $2/$4/$6/$8 everyday value menu and Slammin' Sodas, which increased beverage incidents by 100 basis points. Partnered with NVIDIA for a limited-time breakfast promotion, reaching new audiences.
- **Off-Premise Growth**: Off-premise sales contributed 1% to Q1 same-restaurant sales, now 22% of total sales. Virtual brand Banda Burrito and digital enhancements boosted online traffic and conversion rates by 16%.
- **Keke's Momentum**: Keke's same-restaurant sales grew 3.9%, outperforming the BBI index. Opened 6 new cafes in Q1 and Q2, with 7 under construction and 3 in permitting, targeting 12-20 openings for the year.

**【CFO Financial Commentary】**
- **Revenue and Margins**: Total operating revenue was $111.6 million, up 1.5% YoY. Adjusted EBITDA was $16.8 million. Franchise operating margin was 50.9%, while company restaurant margin dropped to 9.1% due to higher product costs and new cafe inefficiencies.
- **Commodity Impact**: Egg costs surged 3-4x, leading to temporary surcharges. Egg-related margin impact was $0.5 million in Q1, with costs expected to moderate by late Q2. Commodity inflation guidance raised to 3-5%.
- **Cost Control**: G&A expenses decreased $1.2 million YoY, offsetting inflationary pressures. Digital investments and remodels are key to back-half growth, including a new loyalty CRM program.
- **Guidance**: Expect lower half of same-restaurant sales guidance (-2% to +1%) and adjusted EBITDA in the lower range of $80-85 million. Share buybacks will prioritize cash flow generation.

**【Q&A Highlights】**
- **BOGO Sustainability**: Franchisees support the promotion, which is margin-neutral. Will continue refining everyday value and monitoring competitor moves.
- **Consumer Sentiment**: April saw rebound across income cohorts, but caution remains due to macro uncertainty. Off-premise sales resilience and remodels are key back-half drivers.
- **Keke's Expansion**: 6 new openings YTD, with 7 under construction. Franchisee interest in Keke's remains strong, despite economic headwinds. Seed-and-feed strategy may take 18-24 months to yield returns.
- **Egg Cost Outlook**: Prices expected to stabilize by Q3, with surcharges removed by end of Q2. Long-term focus on menu simplification and supply chain optimization.

Denny's (DENN)-5 May 25-2025 Q1 Earnings call transcript

- **Q4 Growth Drivers**: Denny's +1.1% system-wide sales, Keke's +3% despite hurricanes. Virtual brands (Banda Burrito) added 70bps to Denny's same-restaurant sales.
- **Value Strategy Impact**: $2/$4/$6/$8 menu drove 19% value incidence, with Everyday Value Slam leading +6.5% check growth.
- **2025 Outlook**: Conservative guidance of -2% to +1% comps, but confident in long-term initiatives like remodels (+6.5% lift) and loyalty program launch.
- **Margin Expansion**: CFO targets mid-teens company margins by 2025, with Keke's mature units already at high-teens profitability.
- **Risk Management**: Accelerated closure of 70-90 low-volume Denny's units to improve franchisee cash flow and reinvest in growth initiatives.


**【CEO Business Update】**
- **Q4 Sales Performance**: Denny's achieved +1.1% system-wide same-restaurant sales, outperforming the BBI Family Dining Index for the 4th consecutive quarter. Keke's delivered +3% system-wide sales, despite hurricane disruptions.
- **Value Strategy Success**: The $2/$4/$6/$8 Value Menu drove incremental sales, with the Everyday Value Slam and Super Slam leading the way. Off-premise sales (including virtual brands The Burger Den, The Meltdown, and Banda Burrito) accounted for 21% of Q4 revenue.
- **Operational Enhancements**: 23 Denny's restaurants underwent Diner 2.0 remodels, delivering a 6.5% sales lift. Keke's introduced a new design prototype with 6-8% sales potential.
- **2025 Outlook**: Guided for domestic same-restaurant sales of -2% to +1% due to macroeconomic uncertainty, but emphasized long-term initiatives like remodels and a new loyalty program.

**【CFO Financial Recap】**
- **Q4 Financials**: Total operating revenue of $114.7M, adjusted EBITDA of $22.2M (+11.1% YoY). Franchise operating margin improved to 51.2%, driven by same-restaurant sales growth.
- **Cost Management**: G&A expenses reduced by 3.5-4% YoY through headcount reductions and support center consolidation. Commodity inflation of 3% and labor inflation of 3% were partially offset by menu price adjustments.
- **2025 Guidance**: Projected adjusted EBITDA of $80-85M, with 25-40 new unit openings (half Denny's, half Keke's). Share buybacks of $15-25M planned.

**【Q&A Highlights】**
- **Profit Margin Confidence**: CFO stated company restaurant margins will expand to mid-teens by 2025, citing operational efficiency gains. Keke's mature units already achieving high-teens margins.
- **Sales Trend Analysis**: January 2025 saw -0.7% Denny's comps due to weather and macro uncertainty, but February showed early signs of stabilization. Keke's maintained +6.2% January comps despite broader market softness.
- **Marketing Strategy**: Shifting focus to $6.99 Everyday Value Slam to meet consumer value needs while maintaining premium menu items. CRM loyalty program launch in H2 2025 expected to drive incremental sales.
- **Keke's Expansion**: 12 new units opened in 2024, expanding into 6 states. 2025 target of 25-40 openings, with 60% company-owned to accelerate market penetration.


Denny's (DENN)-12 Feb 25-2024 Q4 Earnings call transcript

Denny`s (DENN)-30 Jul 24-2024 Q2 Earnings call transcript

Denny`s (DENN)-30 Apr 24-2024 Q1 Earnings call transcript

Denny`s (DENN)-13 Feb 24-2023 Q4 Earnings call transcript

- **Q3 Sales Growth**: 1.8% system-wide growth, 8.4% pricing offset traffic decline.\n- **Value Strategy Success**: 17% value mix, $5.99 Grand Slam test drives traffic.\n- **Keke's Expansion**: 14 franchise agreements for 100 units, 3 new locations.\n- **Off-Premise Growth**: 19% off-premise sales, Banda Burrito expansion to 80 locations.\n- **Financial Strength**: $22.2M EBITDA, 54% free cash flow conversion.\n- **Guidance**: 2023 EBITDA $85-87M, openings 35-45 restaurants.\n- **FAST Act Mitigation**: 3% pricing offset via off-premise, automation.\n

**【CEO Summary Section】**
- Denny's reported system-wide same-restaurant sales growth of 1.8% for Q3 2023, driven by pricing (8.4%) despite traffic softening due to macroeconomic uncertainty.\n- Launched a new fall menu emphasizing breakfast and value, including a $5.99 Grand Slam test in Orlando, which drove traffic without check decline.\n- Off-premise sales remained stable at 19% of total, with Banda Burrito virtual concept expanding to 80 locations.\n- Keke's Breakfast Cafe opened 3 new locations and secured 14 franchise agreements for 100 units, targeting California and Texas.\n- Total value mix increased to 17%, up from 15% in Q1, with Signature Super Slam and $5.99 Grand Slam driving traffic.\n- Modern American Diner prototype unveiled, featuring dedicated pickup areas for off-premise orders.\n- GAIN Program for team development enrolled 172 members, with 70 earning GEDs.\n- Commodity deflation of 1% and labor cost moderation (3% YoY) supported margin improvement.\n- Guidance: Full-year same-store sales growth 2.75-3.5%, openings 35-45 restaurants, adjusted EBITDA $85-87M.\n\n**【CFO Financial Commentary】\n- Franchise and license revenue $61.0M (+6.6% YoY), driven by 51.2% operating margin (vs. 47.0% prior year).\n- Company restaurant sales $53.2M (+1.8%), with Keke's contributing $0.8M.\n- Adjusted EBITDA $22.2M, free cash flow $12.0M (54% of EBITDA).\n- Share repurchases $16.5M, total debt $259M (2.99x leverage).\n- Commodity deflation 1%, labor inflation 3% (moderating from 4% Q2).\n- Guidance: 2023 EBITDA $85-87M, capex $75-77M.\n\n**【Q&A Highlights】\n- Q4 same-store sales expected -1% to +2%, with menu launch and value initiatives driving recovery.\n- 14 franchisees signed 100 Keke's units, with $100M loan pool for development.\n- FAST Act in California may require 3% pricing offset, but off-premise and automation to mitigate.\n- New menu simplifies customization, highlights breakfast, with pricing clusters for regional alignment.\n- Banda Burrito and Franklin Junction virtual brands expand off-premise opportunities.\n- October sales declined sequentially, but menu launch and $5.99 Grand Slam test provide upside.\n

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