DENN - Denny's: In The Penalty Box Until There Is Meaningful Improvement
2024-05-17 14:27:47 ET
Summary
- Denny's Corporation sales fell 6.3% in Q1, missing expectations by $5.2 million.
- Operating margins improved for franchise locations but remained pressured for company-owned stores.
- General and administrative expenses increased while sales continued to decline, a bad combination leading to a decrease in earnings.
- Traders and investors need to wait until there is real operational improvement.
We have been bearish on the restaurant sector by and large for the last three months. First off, within the sector, there is so much competition, and restaurants as a whole, between rent, utilities, labor, and food costs, among other expenses, generally have pretty thin margins. The pressures on the consumer are mounting. This is undeniable....
Denny's: In The Penalty Box Until There Is Meaningful Improvement