Denny's (DENN) Q4 2024 earnings summary

Executive summary

• Fourth quarter 2024 was the strongest of the year, with both Denny's and Keke's achieving positive same-restaurant sales and outperforming BBI Family Dining indices in their respective markets.

• Denny's saw a 1.1% increase in same-restaurant sales, while Keke's achieved 3% growth, despite hurricane impacts in Florida.

• Strategic initiatives included value menu relaunch, virtual brand expansion, digital enhancements, and accelerated closure of lower-volume Denny's units.

• Keke's set a record for new cafe openings, expanding from Florida to six states by year-end, and launched alcohol and digital programs to boost sales.

• Management focused on value leadership, cost reduction, and traffic growth amid macroeconomic headwinds.

Financial highlights

• Q4 2024 operating revenue was $114.7M, down slightly from $115.4M year-over-year; full year revenue was $452.3M, down from $463.9M.

• Adjusted EBITDA for Q4 was $22.2M (up 11.1% year-over-year); full year adjusted EBITDA was $81.4M.

• Adjusted net income per share for Q4 was $0.14; full year adjusted net income was $28.6M ($0.54 per share).

• Average guest check increased 6.5% year-over-year, primarily due to menu categorization changes.

• Off-premise sales remained strong at 21% of Denny's sales, with virtual brands contributing 70bps to same-restaurant sales.

Outlook and guidance

• 2025 guidance is conservative, with system-wide same-restaurant sales expected between -2% and +1%.

• 25–40 new restaurant openings projected, split between Denny's and Keke's; 70–90 closures expected, mainly lower-volume Denny's units.

• Commodity inflation forecasted at 2%–4%; labor inflation at 2.5%–3.5%.

• Adjusted EBITDA guidance for 2025 is $80–85M; share repurchases planned at $15–25M.

• Debt leverage expected to moderate to a long-term target of 2.5x–3.5x, with refinancing planned before August 2025.