Denny's Corporation reported its financial results for the third quarter ending September 24, 2025, revealing a total operating revenue of $113.2 million, a slight increase from $111.8 million in the same quarter of the previous year. The company's net income for the quarter was $632,000, a significant decline from $6.5 million reported in the prior year. Year-to-date, Denny's generated $342.5 million in revenue, up from $337.7 million, but net income fell to $3.4 million from $14.8 million. The decrease in profitability was attributed to rising operational costs and a decline in franchise revenue.
In terms of operational performance, Denny's company restaurant sales increased by 8.9% to $57.4 million for the quarter, driven primarily by a 12-unit increase in Keke's Breakfast Cafe locations and a same-store sales increase of 5.2% at Keke's. However, Denny's same-store sales decreased by 1.4% during the quarter. The total number of restaurants as of September 24, 2025, stood at 1,537, with 1,452 franchised and licensed locations and 85 company-operated restaurants. The company also reported a working capital deficit of $61.4 million, up from $55.6 million at the end of the previous fiscal year.
Denny's has been actively pursuing strategic initiatives, including the acquisition of five Keke's franchise units, which contributed to an increase in goodwill to $68.5 million. The company is also investing approximately $4 million in a new cloud-based restaurant technology platform aimed at enhancing customer experience, with the rollout expected to continue through 2027. Additionally, Denny's has amended its credit facility, extending the maturity date to January 29, 2027, while reducing the facility's capacity to $325 million and imposing restrictions on share repurchases and dividends.
The company faced increased costs, with total operating expenses rising to $102.9 million for the quarter, compared to $100 million in the prior year. General and administrative expenses increased by 13.8% to $22.6 million, driven by higher incentive compensation and transaction costs related to the proposed merger. Denny's has also recorded impairment charges of $3.3 million year-to-date, primarily related to closed franchise restaurants and the relocation of support functions.
Looking ahead, Denny's management remains cautious about the economic environment and its impact on consumer spending. The company expects to continue focusing on operational efficiency and strategic growth initiatives, including the ongoing integration of Keke's and the enhancement of its technology infrastructure. The effective tax rate for the fiscal year is projected to be between 25% and 29%, reflecting the impact of recent tax legislation.
About DENNY'S Corp
Denny’s Corporation operates a leading full-service restaurant chain, primarily through franchising, offering breakfast, lunch, and dinner menus in the U.S. and internationally. Its core brands include Denny’s and Keke’s Breakfast Cafe, focusing on value, quality, and convenience. The company emphasizes franchise growth, menu innovation, and operational excellence to deliver a welcoming dining experience and strong brand recognition.
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