SPARTANBURG S.C. Buoyed by property sales and a slight uptick in the same-store sales at company units, Denny’s Corp. reported a net income for the first quarter ended March 26 of $5 million, or 5 cents a share, on revenues of $196 million, down 17 percent from the year-ago quarter.
The results compare with a profit of $1.2 million, or 1 cent per share, on revenues of $236.7 million for the same quarter of the prior year.
Same-store sales edged up year-over-year by 0.7 percent at company units, reflecting a 5.7-percent rise in the average guest check and a 4.7-percent decline in traffic. Same-store sales for franchised units slipped 0.9 percent, the company said.
Denny’s, which operates or franchises 1,550 family-dining restaurants, attributed the nearly four-fold increase in net income to an ongoing restructuring plan. That effort included the sale of 21 restaurants during the quarter to four franchisees. The company ended the quarter with 128 fewer corporate units than it had a year earlier. Franchisees opened nine units during the most recent period, and the franchisor opened one store and closed one.
"We are pleased with the progress we are making to optimize our business model and strengthen our balance sheet, despite the difficult operating and economic environment impacting our industry,” said Nelson Marchioli, Denny’s president and chief executive. “We are confronting the challenges of reduced consumer spending and rising commodity costs with promotional items that have strong customer appeal and offer a compelling value but are also designed to benefit our food cost margins.”
He warned that “we do not foresee near-term improvement in the macroeconomic pressures on our business.”