Q1 2025 Denny's Corp Earnings Call Transcript
Key Points
- Denny's Corp (DENN) introduced a successful Buy One Slam, Get One for $1 promotion, which attracted nearly 70% of transactions from lapsed or new customers.
- The company saw a positive impact from its off-premise sales, contributing a 1% improvement in same restaurant sales during Q1, with off-premise channels now representing 22% of total sales.
- Keke's Breakfast Cafe, a growth brand for Denny's Corp (DENN), reported a 3.9% increase in same restaurant sales and outperformed the BBI Family Dining Index in Florida by nearly 400 basis points.
- Denny's Corp (DENN) launched innovative menu offerings like Slammin' Sodas, which increased beverage incidents by over 100 basis points.
- The company is making strategic investments in digital enhancements, including a new loyalty CRM platform set to launch in the back half of the year, expected to drive future sales growth.
- Denny's Corp (DENN) reported a 3% decrease in same restaurant sales for the first quarter, losing traction compared to the BBI Family Dining Sales Index.
- The company faced macroeconomic pressures, including negative consumer sentiment due to tariffs and higher prices, leading to reduced consumer spending.
- Adjusted company restaurant operating margin decreased to 9.1% from 13.0% in the prior year quarter, impacted by higher product costs and inefficiencies in new cafe openings.
- Egg prices significantly impacted margins, with costs increasing 3 to 4 times, leading to temporary surcharges at some locations.
- Denny's Corp (DENN) closed 14 franchise restaurants during the quarter, consistent with its strategy to close underperforming locations.
Ladies and gentlemen, greetings and welcome to the Denny's Corporation First Quarter 2025 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Kayla Money, Senior Director of Investor Relations. Please go ahead.
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Good afternoon. Thank you for joining Denny's First Quarter 2025 Earnings Conference Call. With me today from management are Kelli Valade, Denny's Chief Executive Officer; and Robert Verostek, Denny's Executive Vice President and Chief Financial Officer. Please refer to our website at investor.dennys.com to find our first quarter earnings press release along with the reconciliation of any non-GAAP financial measures mentioned on the call today.
This call is being webcast. An archive of the webcast will be available on our website later today. Kelli will begin today's call with a business update, then Robert will provide a recap of our
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