Kelli Valade, Chief Executive Officer, stated, "Our third quarter progress on strategic initiatives demonstrates our ability to remain agile and focused on what is within our control amid a choppy industry backdrop. These achievements are the direct result of our incredible teams and franchisees maintaining their unwavering commitment to our brands and our guests."
"Denny's is evolving its value offerings to meet the guest where they are, strengthening its brand relevance with an enhanced digital presence, a movie collaboration, and the launch of its highly-anticipated new loyalty program. Keke's is capitalizing on continued portfolio growth and exceptional guest satisfaction while maintaining its position as a brand leader in the fastest growing segment. We will remain agile and continue working closely with our franchisees to navigate this dynamic consumer environment."
Third Quarter 2025 Highlights
Total operating revenue was $113.2 million and total operating income was $10.4 million.
Denny's domestic system-wide same-restaurant sales** were (2.9%) compared to the prior year quarter.
Keke's domestic system-wide same-restaurant sales** increased 1.1% compared to the prior year quarter.
Denny's opened one franchised restaurant.
Denny's completed 10 remodels, including two at company restaurants.
Keke's opened four new cafes, including three franchised locations.
Keke's completed three remodels, including two at company cafes.
Adjusted franchise operating margin* was $29.1 million, or 52.0% of franchise and license revenue, and adjusted company restaurant operating margin* was $7.8 million, or 13.5% of company restaurant sales.
Net income was $0.6 million, or $0.01 per diluted share.
Adjusted net income* and adjusted net income per share* were $4.2 million and $0.08, respectively.
Adjusted EBITDA* was $19.3 million.
Third Quarter 2025 Results
Total operating revenue was $113.2 million compared to $111.8 million for the prior year quarter. This increase was primarily driven by additional Keke's company equivalent units and partially offset by the Company's previously communicated strategy to intentionally close lower volume Denny's franchised restaurants to improve the overall health of the brand.
Franchise and license revenue was $55.9 million compared to $59.1 million for the prior year quarter. This change was primarily due to fewer Denny's franchise equivalent units and softer Denny's same-restaurant sales**.
Company restaurant sales were $57.4 million compared to $52.7 million for the prior year quarter. This increase was primarily driven by additional Keke's equivalent units.
Adjusted franchise operating margin* was $29.1 million, or 52.0% of franchise and license revenue, compared to $30.1 million, or 50.9% for the prior year quarter. This margin change was primarily due to fewer Denny's equivalent units and softer Denny's same-restaurant sales**.
Adjusted company restaurant operating margin* was $7.8 million, or 13.5% of company restaurant sales, compared to $6.1 million, or 11.5% for the prior year quarter. This increase was primarily due to a $1.5 million benefit related to excess credit card fees charged by Visa and Mastercard between 2004 and 2019, partially offset by higher occupancy costs and inherent inefficiencies associated with new cafe openings.
Total general and administrative expenses were $22.6 million compared to $19.8 million in the prior year quarter. This change was primarily due to additional incentive compensation and transaction costs, partially offset by lower corporate administrative expenses.
The provision for income taxes was $1.3 million, reflecting an effective tax rate of 67.4% for the current quarter, compared to $1.5 million and an effective tax rate of 18.5% in the prior year quarter. The higher effective income tax rate for the current quarter included discrete items related to share-based compensation which were not comparable to the prior year quarter.
Net income was $0.6 million, or $0.01 per diluted share. Adjusted net income* was $4.2 million, or $0.08 per diluted share.
The Company ended the quarter with $269.2 million of total debt outstanding, including $259.5 million of borrowings under its credit facility.Capital Allocation
The Company invested $9.3 million in cash capital expenditures during the current quarter, which included Keke's new cafe development and remodels at both Denny's and Keke's company locations.
Conference Call and Business Outlook
The Company announced today it had entered into a definitive agreement to be acquired by a group consisting of TriArtisan Capital Advisors LLC, Treville Capital Group, and Yadav Enterprises, Inc. The merger is expected to close in the first quarter of 2026, subject to customary conditions, including approval by the Company's stockholders and satisfaction of regulatory approvals. Upon completion of the transaction, Denny's common stock will no longer be listed on the Nasdaq.
As customary during the pendency of such a transaction, the Company will not host a conference call or provide financial guidance for fiscal year 2025.
*Please refer to the Reconciliation of Net Income to Non-GAAP Financial Measures, as well as the Reconciliation of Operating Income to Non-GAAP Financial Measures included in the tables below.
** Same-restaurant sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open during the comparable periods noted. Total operating revenue is limited to company restaurant sales and royalties, advertising revenue, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company's results as reported under GAAP.
About Denny's Corporation
Denny's Corporation is one of America's largest full-service restaurant chains based on number of restaurants. As of September 24, 2025, the Company consisted of 1,537 restaurants, 1,452 of which were franchised and licensed restaurants and 85 of which were company operated.
The Company consists of the Denny's brand and the Keke's brand. As of September 24, 2025, the Denny's brand consisted of 1,459 global restaurants, 1,397 of which were franchised and licensed restaurants and 62 of which were company operated. As of September 24, 2025, the Keke's brand consisted of 78 restaurants, 55 of which were franchised restaurants and 23 of which were company operated.
For further information on Denny's Corporation, including news releases, links to SEC filings, and other financial information, please visit investor.dennys.com.
Non-GAAP Definition Changes
The Company has evolved its definition of non-GAAP financial measures to provide more clarity and comparability relative to peers. Denny's Corporation management uses certain non-GAAP measures in analyzing operating performance and believes that the presentation of these measures provides investors and analysts with information that is beneficial to gaining an understanding of the Company's financial results. Non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP.
The Company excludes certain legal settlement expenses not considered to be normal and recurring, pre-opening expenses, and other items management does not consider in the evaluation of its ongoing core operating performance from adjusted operating margin*, adjusted net income*, adjusted net income per share*, and adjusted EBITDA*. In addition, the Company no longer deducts cash payments for restructuring and exit costs, or cash payments for share-based compensation from Adjusted EBITDA*.
Reconciliations of these non-GAAP measures are included in the tables of this press release and a recast of historical non-GAAP financial measures can be found on the Company's website, or its most recent investor presentation.
_________________________________
Cautionary Language Regarding Forward-Looking Statements
The Company urges caution in considering its current trends and any outlook on earnings disclosed in this press release. In addition, certain matters discussed in this release may constitute forward-looking statements. These forward-looking statements, which reflect management's best judgment based on factors currently known, are intended to speak only as of the date such statements are made and involve risks, uncertainties, and other factors that may cause the actual performance of Denny's Corporation, its subsidiaries, and underlying restaurants to be materially different from the performance indicated or implied by such statements. Words such as "expect", "anticipate", "believe", "intend", "plan", "hope", "will", and variations of such words and similar expressions are intended to identify such forward-looking statements. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Factors that could cause actual performance to differ materially from the performance indicated by these forward-looking statements include, among others: economic, public health and political conditions that impact consumer confidence and spending, commodity and labor inflation; the potential impacts of tariffs; the ability to effectively staff restaurants and support personnel; the Company's ability to maintain adequate levels of liquidity for its cash needs, including debt obligations, payment of dividends, planned share repurchases and capital expenditures as well as the ability of its customers, suppliers, franchisees and lenders to access sources of liquidity to provide for their own cash needs; competitive pressures from within the restaurant industry; the level of success of the Company's operating initiatives and advertising and promotional efforts; adverse publicity; health concerns arising from food-related pandemics, outbreaks of flu viruses or other diseases; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy (including with regard to energy costs), particularly at the retail level; political environment and geopolitical events (including acts of war and terrorism); and other factors from time to time set forth in the Company's SEC reports and other filings, including but not limited to the discussion in Management's Discussion and Analysis and the risks identified in Item 1A. Risk Factors contained in the Company's Annual Report on Form 10-K for the year ended December 25, 2024 (and in the Company's subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K).
DENNY'S CORPORATION
Consolidated Balance Sheets
(Unaudited)
($ in thousands)
9/24/25
12/25/24
Assets
Current assets
Cash and cash equivalents
$
2,224
$
1,698
Investments
—
1,106
Receivables, net
16,137
24,433
Inventories
2,122
1,747
Assets held for sale
891
381
Prepaid and other current assets
12,226
10,628
Total current assets
33,600
39,993
Property, net
123,827
111,417
Finance lease right-of-use assets, net
5,397
6,200
Operating lease right-of-use assets, net
135,464
124,738
Goodwill
68,532
66,357
Intangible assets, net
89,271
91,739
Deferred financing costs, net
589
1,066
Other noncurrent assets
46,238
54,764
Total assets
$
502,918
$
496,274
Liabilities
Current liabilities
Current finance lease liabilities
$
1,347
$
1,284
Current operating lease liabilities
15,215
15,487
Accounts payable
23,833
19,985
Other current liabilities
54,651
58,842
Total current liabilities
95,046
95,598
Long-term liabilities
Long-term debt
259,500
261,300
Noncurrent finance lease liabilities
8,376
9,284
Noncurrent operating lease liabilities
132,007
120,841
Liability for insurance claims, less current portion
5,904
5,866
Deferred income taxes, net
8,731
9,964
Other noncurrent liabilities
26,048
27,446
Total long-term liabilities
440,566
434,701
Total liabilities
535,612
530,299
Shareholders' deficit
Common stock
519
513
Paid-in capital
6,882
—
Retained earnings (deficit)
929
(2,499
)
Accumulated other comprehensive loss, net
(39,429
)
(32,039
)
Treasury stock
(1,595
)
—
Total shareholders' deficit
(32,694
)
(34,025
)
Total liabilities and shareholders' deficit
$
502,918
$
496,274
Debt Balances
Credit facility revolver due 2026
$
259,500
$
261,300
Finance lease liabilities
9,723
10,568
Total debt
$
269,223
$
271,868
DENNY'S CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
Quarter Ended
($ in thousands, except per share amounts)
9/24/25
9/25/24
Revenue:
Company restaurant sales
$
57,375
$
52,701
Franchise and license revenue
55,869
59,058
Total operating revenue
113,244
111,759
Costs of company restaurant sales, excluding depreciation and amortization
50,170
46,820
Costs of franchise and license revenue, excluding depreciation and amortization
26,808
28,999
General and administrative expenses
22,567
19,831
Depreciation and amortization
4,434
3,622
Operating (gains), losses and other charges, net
(1,129
)
746
Total operating costs and expenses, net
102,850
100,018
Operating income
10,394
11,741
Interest expense, net
5,318
4,571
Other nonoperating expense (income), net
3,137
(824
)
Income before income taxes
1,939
7,994
Provision for income taxes
1,307
1,478
Net income
$
632
$
6,516
Net income per share - basic
$
0.01
$
0.12
Net income per share - diluted
$
0.01
$
0.12
Basic weighted average shares outstanding
52,054
52,148
Diluted weighted average shares outstanding
52,175
52,207
Comprehensive income (loss)
$
(822
)
$
(2,468
)
General and Administrative Expenses
Corporate administrative expenses
$
15,516
$
15,875
Share-based compensation
3,249
3,006
Incentive compensation
2,028
447
Deferred compensation valuation adjustments
682
503
Transaction costs
1,092
—
Total general and administrative expenses
$
22,567
$
19,831
DENNY'S CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
Three Quarters Ended
($ in thousands, except per share amounts)
9/24/25
9/25/24
Revenue:
Company restaurant sales
$
169,670
$
159,391
Franchise and license revenue
172,868
178,269
Total operating revenue
342,538
337,660
Costs of company restaurant sales, excluding depreciation and amortization
152,540
142,516
Costs of franchise and license revenue, excluding depreciation and amortization
84,379
89,801
General and administrative expenses
64,042
61,539
Depreciation and amortization
12,919
10,938
Goodwill impairment charges
—
20
Operating (gains), losses and other charges, net
4,482
1,984
Total operating costs and expenses, net
318,362
306,798
Operating income
24,176
30,862
Interest expense, net
15,120
13,564
Other nonoperating expense (income), net
2,736
(1,685
)
Income before income taxes
6,320
18,983
Provision for income taxes
2,892
4,208
Net income
$
3,428
$
14,775
