Denny’s Corp. Earnings Cheat Sheet: Beats the Street on Profit Rise

Denny’s Corporation (NASDAQ:DENN) reported net income above Wall Street’s expectations for the first quarter. Denny’s operates a family-style restaurant chains in America. The company, through its wholly-owned subsidiaries, Denny’s Holdings and Denny’s, owns and operates the Denny’s restaurant brand.

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Denny’s Earnings Cheat Sheet for the First Quarter

Results: Net income for Denny’s Corporation rose to $5.9 million (6 cents per share) vs. $4.1 million (4 cents per share) in the same quarter a year earlier. This marks a rise of 43.1% from the year-earlier quarter.

Revenue: Fell 6.7% to $126.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Denny’s Corporation beat the mean analyst estimate of 5 cents per share. Analysts were expecting revenue of $127.9 million.

Quoting Management: John Miller, President and Chief Executive Officer, stated, “We are encouraged about our start to the year. During the first quarter, we achieved the highest quarterly system-wide same-store sales increase in almost five years despite the persistently challenging economic environment. We remain committed to differentiating Denny’s in the market place and executing successfully on our strategies to further reinforce our position as America’s Favorite Diner. We will continue to work closely with our franchisees to maintain the growth in new units, sales and profitability, while generating additional free cash to further strengthen our balance sheet in our efforts to increase long-term shareholder value.”

Key Stats:

Last quarter, the company’s gross margin expanded 67.3 percentage points from the year-earlier quarter to 91.1%. It was the fifth consecutive quarter of gross-margin growth. During this time, margins have grown an average of 14 percentage points per quarter on a year-over-year basis.

Revenue has dropped for three consecutive quarters. In the fourth quarter of the last fiscal year, revenue declined 4.2% to $130.2 million while the figure fell 2.3% in the third quarter of the last fiscal year from the year earlier.

The company has beaten estiamtes for two quarters in a row. In the fourth quarter of the last fiscal year, it topped expectations with net income of 9 cents versus a mean estimate of net income of 8 cents per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 9 cents a share to 7 cents over the last ninety days. The average estimate for the fiscal year is 28 cents per share, down from 39 cents ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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