Denny’s Corp. continues to expand its 24/7 hours as the diner chain moves farther from pandemic restrictions, with about three-quarters of its system offering service around the clock, executives said Tuesday.
The Spartanburg, S.C.-based company, which also owns the Keke’s Breakfast Café brand, said return to 24-hour service systemwide was a bit “wobbly,” according to Kelli Valade, Denny’s CEO, who updated analysts on an earnings call for the second quarter, which ended June 28.
“With 75% of Denny's restaurants now operating 24 hours, we are not only proud of the great progress we have made but also the fact that we have cemented our late-night leadership position in the market once again,” Valade said, adding that “some of the restaurants that have challenges are either in a travel center or in locations where tourism is just off.” Florida is one such market, she noted.
Robert Verostek, Denny’s chief financial officer, said the brand would continue to press toward getting 90% of its system open 24 hours. Some options include franchise restaurants that open three nights a week as opposed to seven, he said.
Valade said off-premises sales remained consistent in the second quarter at about 19% of total sales.
In June, Denny’s revamped and relaunched its Denny’s Rewards program in partnership with Sparkfly and Olo “with the goal of forging a next-generation intelligent customer engagement ecosystem designed to surprise and delight our guests with personalized offers and experiences,” Valade said.
The loyalty program enhanced personalization and introduced gamification through the introduction of exclusive Denny's Rewards challenges, she said.
“Every month, Rewards members will get an exclusive opportunity to complete challenges and earn additional rewards the following month,” Valade said. “And through this increased engagement, we are bolstering knowledge about our guests and their preferences. This will unlock the ability to recognize our guests across the omnichannel guest experience and reward them accordingly.”
Since the June 22 launch of the Denny’s Rewards, more than 200,000 new member sign-ups have been added, bringing the total to more than 6 million loyalty members.
“In time, we expect our data investments to result in additional ROI opportunities and be a traffic driver,” Valade said.
Verostek said Keke's franchise disclosure document had been filed. Denny’s acquired Keke’s, a daytime breakfast concept, a year ago.
“We have recently conducted over a dozen meetings with Denny's franchisees who are interested in the Keke's brand,” Verostek said. “A similar number of meetings with Denny's franchisees are scheduled to take place over the next few weeks as we prepare to accelerate the growth of Keke’s over the next several years.”
Valade said the first Keke’s outside its home base in Florida will be in the Nashville, Tenn., area. “We're excited to bring the winning Keke's experience to a new set of consumers soon,” she said.
For the second quarter ended June 28, Denny’s posted net income of $8.5 million, or 15 cents a share, down from $23 million, or 37 cents share, in the same period a year ago. Revenues rose to $116.9 million from $115 million in the year-ago quarter.
Denny's domestic systemwide same-store sales grew 3% compared to the equivalent fiscal period in 2022, including increases of 3% at domestic franchised restaurants and 3% at company-operated restaurants.
Denny’s opened 10 franchised restaurants, including four international Denny's locations and one Keke's location in the quarter.
As of June 28, Denny’s Corp. had 1,646 restaurants, 1,572 of which were franchised and licensed restaurants and 74 of which were company operated under the Denny’s and Keke’s brands. As of June 28, the Keke's brand consisted of 55 restaurants, 47 franchised and eight company operated.
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