Executive Summary

Q1 2025 revenue was $111.6M, up 1.5% YoY and modestly above Street consensus ($110.0M*), while Adjusted EPS was $0.08 versus Primary EPS consensus of ~$0.084*, and Adjusted EBITDA was $16.8M versus EBITDA consensus of ~$17.8M* . Values marked * retrieved from S&P Global.
Mix and margin headwinds were driven by egg inflation (commodities ~5% in Q1, with eggs up 3–4x vs prior pricing and a ~100bps impact to adjusted company margin), plus expected inefficiencies from new Keke’s café openings; eggs have moderated to ~2x prior levels and surcharges are expected to be removed by end of May .
Guidance maintained on same-restaurant sales, openings/closures, G&A, and Adjusted EBITDA ($80–$85M), but commodity inflation was raised to 3–5% (from 2–4%) and management signaled likely delivery at the lower end of EBITDA and share repurchases ranges given the choppy consumer backdrop .
Tactical pivot to value is resonating: the BOGO Slam drove April comps to approximately flat and ~70% of BOGO transactions came from lapsed/new customers; off-premise mix reached ~22% with a 1% contribution to Q1 comps, providing resilience and incremental traffic .

What Went Well and What Went Wrong

What Went Well

Compelling value and new promotions helped stabilize traffic: “Buy One Slam Get One for $1” drove April same-restaurant sales to approximately flat and ~70% of transactions were from lapsed/new guests .
Off-premise strategy delivered: off-premise represented ~22% of sales and contributed +1% to Q1 same-restaurant sales, aided by the third virtual brand (Banda Burrito) and digital conversion improvements over 16% .
Keke’s momentum and expansion: system-wide SSS +3.9% with continued outperformance in Florida by ~400 bps; 3 new cafés opened (including first in Georgia) and 3 additional cafés opened early Q2, supported by strong guest sentiment (4.8 Google rating) .

What Went Wrong

Denny’s domestic system-wide SSS declined 3.0% amidst an “aggressive value-driven environment” and macro pressure on lower-income consumers; company margin compressed on higher product costs (eggs), marketing investments, and opening inefficiencies .
Adjusted company restaurant operating margin fell to 9.1% (from 13.0% prior year), with ~100bps impact from eggs and ~70bps from Keke’s new café inefficiencies; adjusted franchise margin also ticked down to 50.9% (from 52.5% prior year) on fewer equivalent units and softer comps .
Elevated effective tax rate of 47.4% (vs 24.6% prior year) on discrete share-based compensation items, and net income decreased to $0.3M (GAAP diluted EPS $0.01) despite higher revenue .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Total Operating Revenue ($USD Millions)	$111.8	$114.7	$111.6
Operating Income ($USD Millions)	$11.7	$14.5	$5.2
Adjusted EBITDA ($USD Millions)	$20.0	$22.2	$16.8
Diluted EPS - GAAP ($USD)	$0.12	$0.13	$0.01
Adjusted EPS ($USD)	$0.14	$0.14	$0.08
Adjusted Franchise Operating Margin %	51.0%	51.2%	50.9%
Adjusted Company Restaurant Operating Margin %	11.8%	11.3%	9.1%
Restaurant-level Operating Margin %	32.2%	32.3%	29.8%

Segment	Q3 2024	Q4 2024	Q1 2025
Franchise & License Revenue ($M)	$59.1	$62.3	$57.7
Costs excl. D&A ($M)	$29.0	$30.4	$28.4
Adjusted Franchise Margin %	51.0%	51.2%	50.9%
Company Restaurant Sales ($M)	$52.7	$52.4	$53.9
Costs excl. D&A ($M)	$46.8	$47.2	$50.0
Adjusted Company Margin %	11.8%	11.3%	9.1%

KPI	Q3 2024	Q4 2024	Q1 2025
Denny’s Domestic System-wide SSS (%)	(0.1%)	1.1%	(3.0%)
Keke’s Domestic System-wide SSS (%)	(1.0%)	3.0%	3.9%
Off-Premise Mix (% of Sales)	—	—	22%
Denny’s Openings / Closures (Units)	2 / 18	4 / 30	6 / 14
Keke’s Openings (Q)	—	8	3
Total Debt ($USD Millions)	$272.0	$271.9	$276.2
Effective Tax Rate (%)	18.5%	33.8%	47.4%

Q1 2025 vs Estimates (S&P Global)	Consensus*	Actual	Surprise
Revenue ($USD Millions)	$110.0*	$111.6	+1.5%
Primary EPS ($USD)	$0.084*	$0.08	-4.9%
EBITDA ($USD Millions)	$17.8*	$13.63*	-23.6%

Values marked * retrieved from S&P Global. Note: Company-reported Adjusted EBITDA was $16.8M , which is closer to, but still below, Street consensus; SPGI’s “actual” EBITDA figure may reflect a GAAP-normalized methodology rather than company’s non-GAAP measure.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Denny’s Domestic System-wide SSS	FY 2025	(2.0%) to 1.0%	(2.0%) to 1.0%	Maintained; CFO expects lower half
Consolidated Openings	FY 2025	25 to 40	25 to 40	Maintained
Consolidated Closures	FY 2025	70 to 90	70 to 90	Maintained
Commodity Inflation	FY 2025	2.0% to 4.0%	3.0% to 5.0%	Raised
Labor Inflation	FY 2025	2.5% to 3.5%	2.5% to 3.5%	Maintained
Total G&A ($)	FY 2025	$80M to $85M	$80M to $85M	Maintained
Adjusted EBITDA ($)	FY 2025	$80M to $85M	$80M to $85M	Maintained; likely lower end
Share Repurchases ($)	FY 2025	$15M to $25M	$15M to $25M	Maintained; likely lower end

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Value Strategy	Relaunch of $2-$4-$6-$8 value menu; outperformed category	Continued value positioning; outperformed BBI in Q4	BOGO Slam drove ~flat April comps; ~70% lapsed/new customers	Intensifying promotional value; traffic-led recovery
Off-Premise & Virtual Brands	Banda Burrito expansion; off-premises growth	Continued progress; record Keke’s openings	Off-premise 22% mix; +1% to SSS; launch of third virtual brand aided traffic	Structural contributor to sales resilience
Pricing/Mix	N/A	N/A	~3pts rollover pricing in 2025; ~2% May pricing; BOGO mix ~4–5% with <0.5pt mix impact	Modest pricing; careful check management
Commodities (Eggs)	N/A	N/A	Egg costs spiked 3–4x; ~100bps margin hit; now ~2x and moderating; surcharges removed by end of May	Peak in Q1, easing into Q2/Q3
Remodels & Loyalty CRM	Program ongoing	23 remodels in FY; continued	Company fleet >50% remodeled under new image; CRM loyalty platform launches in back half	Back-half catalysts
Macro & Tariffs	N/A	N/A	“Aggressive value-driven environment”; lower-income pressure; tariff rhetoric risk	Cautious tone; sensitivity to low-income consumers
Keke’s Expansion & Refranchising	Sequential SSS improvement	Record openings, new states	6 YTD openings by early Q2; 7 under construction, 3 in permitting; refranchising packages in market	Scaling with near-term inefficiencies

Management Commentary

“We are now operating in one of the most aggressive value-driven environments we've seen in years… every brand is fighting for share by pushing harder on price and promotion” .
“Nearly 70% of BOGO transactions have come from lapsed or new customers. And as a result, April same-restaurant sales came in approximately flat.” .
“Our off-premise sales contributed a 1% improvement in same-restaurant sales during Q1… represents a 22% mix… launch of our third virtual brand, Banda Burrito, and smart investments in digital.” .
“Commodities at Denny's were approximately 5% during the first quarter and heavily impacted by eggs… pricing decision [surcharge] was made market by market… net sentiment scores increased over 8 points during Q1 to 60” .
“We will likely be at the lower end of both our adjusted EBITDA guidance range of $80 million to $85 million and our share repurchase guidance range of $15 million to $25 million.” .

Q&A Highlights

Value cadence and franchise appetite: Management views BOGO as promotional value that can be pulsed; franchisees are pleased given traffic-driving impact, with restaurants “at or marginally above profit neutral” .
Pricing outlook: ~3% rollover pricing from 2024; ~2% taken in May (effective ~1–1.5%); unclear on fall pricing pending environment; BOGO mix impact likely less than 0.5pt .
Macro sensitivity: Lower-income cohorts (<$50k) saw sharper Q1 pullback; cohorts >$60k rebounded in April; cautious stance given tariff rhetoric and consumer uncertainty .
Keke’s inefficiencies: ~70bps Q1 company margin impact from new café inefficiencies; maturation expected over 6–12 months toward upper-teens margins; refranchising progressing but seed-and-feed unlock likely back to 18–24 months in current environment .
Tariffs and build/remodel exposure: Focus on optimizing spend, right-sizing components; key tariff risk is macro impact on lower-income consumer rather than specific build costs .

Estimates Context

Revenue beat by ~1.5% vs Street ($111.6M vs $110.0M*) and Primary EPS modest miss ($0.08 vs ~$0.084*), reflecting traffic gains offset by margin compression from eggs and opening inefficiencies . Values marked * retrieved from S&P Global.
EBITDA miss versus consensus (SPGI actual ~$13.6M* vs consensus ~$17.8M*), though company-reported Adjusted EBITDA was $16.8M; differences reflect GAAP vs non-GAAP definitions. Expect near-term estimate revisions lower for margins, partially offset by improving commodity trajectory and value-driven traffic .

Key Takeaways for Investors

Near-term setup: Value promotions (BOGO) are demonstrably driving transactions and new/lapsed customer trial; watch for sustained traffic and margin balancing as promotions run through Q2 .
Margin recovery drivers: Egg price normalization and removal of surcharges by end of May should ease cost pressure; off-premise mix and digital conversion gains support margin resilience .
Guidance risk skew: With commodity inflation raised and management guiding to lower-end EBITDA/share repurchases, Street EBITDA/margin estimates likely drift lower until comps/mix and commodities visibly stabilize .
Keke’s scaling: Strong sentiment and openings pipeline (6 YTD by early Q2; 7 under construction, 3 in permitting) provide growth, but expect continued early-stage inefficiencies and measured refranchising timelines (18–24 months) .
Back-half catalysts: Remodels, value strategy refinement, and loyalty CRM launch in H2 could re-accelerate traffic and improve LTV of acquired customers; monitor KPI traction and cohort behavior .
Balance sheet/liquidity: Total debt ~$276M at quarter-end with leverage ~3.9x; buybacks remain in plan but positioned at lower end given macro uncertainty .
Trading lens: Stock likely sensitive to monthly comp updates and visibility on margin cadence; beats/misses driven by traffic vs check dynamics and commodity path—focus on April/May comps, commodity prints, and promo ROI .

Note: We searched for an Item 2.02 Form 8‑K for Q1 2025 but did not find one; analysis leverages the May 5, 2025 earnings press release and the full Q1 2025 earnings call transcript . Additional relevant Q1 press release: BOGO Slam value promotion (Mar 25, 2025) .

DENNY'S Corp (DENN)·Q1 2025 Earnings Summary