Denny's (DENN) Reports Q4 & Fiscal 2023 Preliminary Results
Denny's Corporation DENN reported select preliminary and unaudited fourth quarter and fiscal 2023 results, ended Dec 27.
The company states optimism regarding the preliminary results, wherein they reached the high-end guided range for the full year and showcased sequential improvements, despite a challenging operating environment.
Per the results, Denny’s domestic system-wide same-restaurant sales in the fourth quarter and fiscal year 2023 were 1.3% and 3.5%, respectively. This was compared with the year-ago comparable period’s domestic system-wide same-restaurant sales of 2% and 6.3%, respectively. Furthermore, in 2023, the company opened 32 restaurants, which included 11 international locations, bringing the fiscal 2023 year-end restaurant count to 1,631.
In fiscal 2023, Denny’s allocated $52.1 million to share repurchases, including $16.2 million in the fourth quarter of fiscal 2023. Also, the company had approximately $100 million remaining under its existing repurchase authorization as of Dec 27, 2023.
Following the announcement shares of this American table service diner-style restaurant chain gained 2.7% during the trading hours on Jan 8.
CRAVE Framework Bodes Well
Denny’s is consistently focusing on increasing its growth prospects through improving its guest experiences, footprint expansion, technological advancements and diversified product offerings. To ensure the efficient mix of all these factors, the company came up with the CRAVE framework in August 2023.
CRAVE is the acronym for creating leading-edge solutions with technology and innovation; robust new restaurant growth as a franchisor of choice; assembling best-in-class people and teams through culture, tools and systems; validating and optimizing the business model to maximize restaurant margins and elevating profitable traffic through the guest experience and uniquely craveable food.
During third-quarter fiscal 2023 earnings call, DENN stated that the efficient execution of the CRAVE strategies has aided the uptrend of its quarterly results. Also, it expects to redesign its menu offerings with the new pricing model that aligns with the CRAVE strategies to increase traffic. The primary aim followed by the company is to increase traffic and improve guest experiences at lower prices.
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Owing to the tailwinds, shares of DENN gained 27.5% in the past three months, outperforming the Zacks Retail - Restaurants industry’s 10.3% growth. Denny’s intends to focus on continuing to strengthen and revitalize the brand through new and relevant strategies under the CRAVE umbrella for increasing growth prospects and competitive edge.
Zacks Rank & Key Picks
Denny’s currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
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It has a trailing four-quarter earnings surprise of 80.8%, on average. The stock has gained 39.5% in the past year. The Zacks Consensus Estimate for SHAK’s 2024 sales and earnings per share (EPS) suggests an increase of 15.2% and 38.3%, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. ARCO currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 28.3%, on average. The stock has risen 47.6% in the past year.
The Zacks Consensus Estimate for ARCO’s 2024 sales and EPS indicates a 10.6% and a 15.5% rise, respectively, from the year-ago period’s levels.
The Gap, Inc. GPS currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 137.9%, on average. The stock has surged 77.7% in the past year.
The Zacks Consensus Estimate for GPS’ fiscal 2024 sales indicates an improvement of 0.9% but the same for EPS implies a decline of 2.8% from the year-ago period’s levels.
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