Denny's eyes higher food costs, price hikes


Denny’s Corp. executives said they will need to raise menu prices to counter inflation pressures in a call with analysts discussing third-quarter earnings.

Company officials remain cautiously optimistic on the chain’s current strategy of blending everyday value propositions and compelling limited-time offers, and said those methods will continue to help build sales.

The Spartanburg, S.C.-based operator, franchisor and licensor of 1,677 family-dining restaurants said net income fell 19.2 percent to $8 million, or 8 cents per share, for the quarter ended Sept. 28, compared with $9.9 million, or 10 cents a share, in the same quarter last year.

Quarterly same-store sales increased 1.1 percent at company-owned restaurants and 0.8 percent at franchised and licensed locations, compared with the prior year, Denny’s said. Corporate revenue fell 2.3 percent to $136.7 million on lower company-store sales from refranchising and lower franchising income compared with the prior year, when a conversion deal with Pilot Flying J Travel Centers brought in additional dollars not available in the latest quarter.

Inflation challenges

John Miller, president and chief executive of Denny’s Corp., said the company’s third quarter results reflect how the chain is “overcoming what remains a fairly challenging consumer economic environment, as well as inflation pressures impacting both our business and customers’ wallets.”

“Our success is being achieved with consistent brand execution leveraging our three primary marketing strategies of delivering every day affordability, creating compelling limited time only product offerings and deriving sales beyond breakfast,” he said.