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Delivery gives Denny’s a 2Q boost

New “On Demand” platform increases off-premise sales, CEO John Miller says

Denny’s Corp. said its newly launched Denny’s On Demand delivery program helped increase off-premise sales in the second quarter.

The Spartanburg, S.C.-based company debuted the delivery platform nationally in May, and the chain saw a 1 percentage point increase in off-premise sales in the second quarter ended June 28, said John Miller, Denny’s president and CEO, in an earnings call Tuesday.

“These new to-go transactions are highly incremental and over-indexed at late night in the dinner day parts,” Miller said. “With 28 percent of domestic system activity engaged with one or more delivery service provider, we anticipate continued long-term growth in our off-premise sales from the Denny's On Demand platform as more restaurants sign delivery agreements.”

Denny's On Demand allows customers to order and pay for to-go items on the web or through new mobile apps that were built in partnership with Olo. The platform also includes new product packaging made from sustainable materials.

“Where available we also launched delivery via Olo’s Dispatch delivery network,” Miller said, “and a number of restaurants have signed separate additional third-party delivery agreements.”

Miller said nearly all the Denny’s system signed up for the Olo program software.

In the second quarter, Denny’s swung to a profit of $8.7 million, or 12 cents a share, compared to a loss of $11.6 million, or 15 cents a share, in the prior-year period. The 2016 quarter’s earnings were impacted by the company’s pension plan liquidation. Revenues rose 7.3 percent, to $133.4 million, up from $124.3 million in the same quarter last year.

Domestic same-store sales rose 2.6 percent systemwide in the quarter, with growth of 2.7 percent at company-owned restaurants and 2.6 percent at franchised units.

Miller gave partial credit for the upward trends to the company’s rebranding efforts. Over the second quarter, 52 franchised restaurants were remodeled and eight new locations were opened.

As of June 28, Denny’s had 1,724 franchised, licensed and company-operated restaurants domestically as well as abroad.

Contact: [email protected]

Twitter: @DanAMX

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