Q2 2025 Denny's Corp Earnings Call Transcript
Key Points
- Denny's Corp (DENN) reported a 1.3% increase in system-wide same restaurant sales, showing a 170 basis point improvement from Q1.
- The company successfully launched a buy one get one slam for a $1 deal, which drove significant traffic and resulted in over 15% of new and lapse users returning for future promotions.
- Off-premise sales contributed a 1.5% improvement in same restaurant sales during Q2, supported by investments in digital and effective promotions on third-party platforms.
- Keke's Breakfast Cafe, a growth brand for Denny's Corp (DENN), delivered strong second quarter same restaurant sales of 4%, outperforming the BBI Family Dining Index in Florida by over 220 basis points.
- Denny's Corp (DENN) is launching a new points-based loyalty program aimed at increasing guest engagement and frequency, expected to deliver between 50 to 100 basis points in traffic over time.
- Denny's Corp (DENN) faced challenges due to macroeconomic pressures in key markets like Los Angeles, San Francisco, Houston, and Phoenix, which contributed to a reduction in system-wide same restaurant sales by approximately 30 basis points.
- The company experienced volatility in dine-in transactions, although off-premise sales remained strong.
- Adjusted company restaurant operating margin decreased to 11.5% from 12.9% in the prior year quarter, impacted by increased product costs and inefficiencies in new cafe openings.
- The company closed 10 franchised restaurants during the quarter, reflecting ongoing challenges in optimizing the franchise system.
- Denny's Corp (DENN) is navigating a choppy consumer environment with household incomes under pressure and volatile consumer sentiment, impacting overall spending.
Ladies and gentlemen, thank you for joining us, and welcome to the Denny's Corporation second quarter 2025 earnings conference call. (Operator Instructions)
I will now hand the conference over to Kayla Money, Senior Director of Investor Relations. Kayla, please go ahead.
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Good afternoon. Thank you for joining Denny's second quarter 2025 earnings conference call. With me today for 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.denny's.com to find our earnings press release along with the reconciliation of any non-GAAP financial measures mentioned on the call today. This call is being webcast and 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 second quarter financial results and the
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