Yahoo Finance Denny's Corp (DENN) (Q1 2024) Earnings Call Transcript Highlights: Navigating Economic ...
Same-Restaurant Sales: Q1 domestic system-wide same-restaurant sales decreased by 1.3%.
Off-Premise Sales: Represented 21% of total sales in Q1.
Revenue: Total operating revenue was $110 million, down from $117.5 million in the prior year quarter.
Franchise and License Revenue: $57.6 million, down from $64 million in the prior year quarter.
Company Restaurant Sales: $52.3 million, compared to $53.5 million in the prior year quarter.
Adjusted EBITDA: $18.4 million.
Net Income Per Share: Adjusted net income per share was $0.11.
Total Debt: Approximately $271 million, with $261 million borrowed under the credit facility.
New Restaurant Openings: Opened eight combined restaurants across brands during the quarter.
Restaurant Closures: 24 franchise closures and one company restaurant closure.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Your guidance for flat to 3% same-store sales growth seems optimistic given the current economic environment. Can you elaborate on the initiatives supporting this outlook? A: Robert Verostek, VP and CFO of Denny's Corp., mentioned that despite economic challenges, Denny's value initiatives, such as the all-day diner deals starting at $5.99, have performed well. Kelli Valade, President and CFO, added that the company's focus on value and menu innovation, along with increased marketing spend and potential remodel programs, are key drivers for optimism in achieving the sales growth target.
Q: Can you discuss the performance and strategic importance of the All Day Diner Deals compared to the Grand Slam promotions? A: Kelli Valade explained that the All Day Diner Deals offer variety and have tested well, showing strong performance in burger sales and other featured items. The strategy focuses on variety and value, which are crucial in the current economic climate.
Q: How is the local co-op matching fund expected to impact marketing spend, and can you clarify the mechanics of this funding? A: Robert Verostek clarified that the local co-op matching involves a shift of 0.5% from national to local marketing, effectively increasing total marketing spend from 3% to 3.5%. This strategy aims to enhance local market penetration while maintaining robust national brand support.
Q: With the introduction of AB 1228 in California, have you observed any significant changes in labor costs or consumer behavior that could impact your operations? A: Robert Verostek noted that it's too early to see definitive trends from AB 1228, but early indications show no significant changes in management or crew turnover. The company remains cautious and continues to monitor the situation closely.
Q: Can you provide insights into the performance and expansion plans for Key's breakfast cafe, especially outside of Florida? A: Kelli Valade highlighted the successful opening in Henderson, Tennessee, and mentioned ongoing plans to remodel existing locations in Florida. The brand is exploring new design elements and potential additions like patios and liquor licenses to enhance guest experience and drive growth.
Q: What are the implications of the new non-GAAP financial measure adjustments, and how do they compare to previous metrics? A: Robert Verostek explained that the adjustments were made to align more closely with industry standards and enhance comparability. The new definition aims to provide clearer insights into the company's financial health and operational performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
