Denny's aims to add new units, continue momentum


Denny’s Corp. will build on the momentum of its repositioning efforts by opening more units and continuing to use a modified “barbell” strategy based on value-priced items and premium LTOs, executives said Wednesday during a call with analysts.

The 1,685-unit family-dining chain will also continue to implement a three-pronged marketing strategy that led to a rebound in same-store sales for fiscal 2011, said president and chief executive John Miller.

“We now have four, going on five quarters under our belt with our America’s Diner/Always Open brand positioning efforts,” Miller said. “With this as a strong foundation and framework, we believe we are at the beginning stages of effectively broadening our consumer base to guests craving their diner favorites, versus the historical, more narrowly focused, breakfast all-day platform.”

He added, “Our success is being achieved through consistent brand execution and leveraging our three primary marketing strategies: delivering every day affordability; creating compelling limited-time only product offerings; and driving sales beyond breakfast.”

Denny’s Corp. reported Wednesday increased net income for the fourth quarter and year ended Dec. 28, although much of the gain was related to tax and impairment charges.

Full-year same-store sales and traffic were up at both company and franchised restaurants in 2011, “the first time all of our same-store metrics have been positive since 2004,” Miller said.

The company plans to continue its America’s Diner positioning, grow the Denny’s brand through traditional and nontraditional venues both domestically and internationally, and increase earnings and free cash flow through the franchise-focused business model Denny’s Corp. has embraced in recent years, including refranchising.

“This enables us to continue to improve a steady track record of strengthening our balance sheet, supporting franchise growth and returning value to our shareholders,” through debt repayment and a stock share purchasing program, Miller said.