Denny's Corporation reported its first-quarter 2025 financial results on May 5, 2025, with total operating revenue increasing to $111.6 million from $110.0 million in the prior year quarter. However, net income for the quarter was $0.3 million, or $0.01 per diluted share, while adjusted net income was $4.2 million, or $0.08 per diluted share, which was in line with analyst estimates.
Denny's domestic system-wide same-restaurant sales declined by 3.0% in Q1 2025, indicating significant challenges for the core brand. In contrast, Keke's Breakfast Cafe continued its strong performance, with domestic system-wide same-restaurant sales increasing by 3.9%. The company opened six franchised Denny's restaurants and completed six remodels, while Keke's opened three new cafes, including its first in Georgia, and acquired five franchised cafes.
Adjusted company restaurant operating margin decreased to 9.1% from 13.0% in the prior year quarter, primarily due to higher product costs, heavily impacted by increased egg prices, along with investments in marketing and new Keke's cafe opening inefficiencies. The company updated its commodity inflation guidance for full year 2025 to between 3.0% and 5.0%, an increase from earlier projections, reflecting persistent cost pressures.
Denny's reiterated its full year 2025 guidance for domestic system-wide same-restaurant sales between negative 2.0% and positive 1.0%, and adjusted EBITDA between $80 million and $85 million. The company ended the quarter with $276.2 million of total debt outstanding, including $266.0 million of borrowings under its credit facility, and invested $9.1 million in capital expenditures, including Keke's new cafe development and Denny's remodels.
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