Fluffier buttermilk pancakes made with fresh ingredients helped boost same-store sales at Denny’s Corp. in the third quarter, the company said Tuesday.
Domestic same-store sales increased 1 percent systemwide for the Sept. 28-ended quarter, including 1-percent increases at both company units and at franchise locations, respectively, though traffic was down about 0.4 percent at company locations and slightly more than 1 percent at franchised units.
John Miller, Denny’s president and CEO, credited improvements the company is making across the menu and with restaurant remodels.
“This consistent performance reflects the ongoing momentum generated by the brand revitalization initiatives launched in 2011,” Miller said during a call with Wall Street analysts. “Our vision remains to become the world’s largest, most admired and loved family local restaurants serving classic American comfort food at a good price around the clock.”
Since 2014, the company has replaced or improved nearly half of all dishes on the menu, and 49 percent of the chain’s restaurants have been remodeled with a new, more contemporary Heritage design, he said.
During the third quarter, for example, Denny’s reformulated its buttermilk pancake recipe switching to fresh eggs, rather than dehydrated product, and adding a hint of vanilla.
Miller noted that 35 percent of guests purchased the dish, up from 29 percent before the change.
The better buttermilk pancakes are part of an ongoing move toward more “real” ingredients, said Miller.
“We assign this to Millennials, but I think it’s all customers. We want food that our body knows what to do with. We want real food,” he said. “Buttermilk and eggs, versus egg parts or dehydrated milk fat, those are just better products. They are fluffier. They taste better.”
The change was made without adding significantly to the price, he noted, saying Denny’s everyday value positioning has been another key aspect of the brand’s success.
“We think it’s important to keep that balance. Denny’s is not trying to become the Four Seasons,” he added. “So pricing and value are really important, but modest bumps in price to have real food, I think consumers really appreciate.”
Third quarter net income increased 8.7 percent to $9.7 million, or 13 cents per diluted share, compared with $9 million, or 11 cents per share, a year ago.
Revenues increased 3.7 percent to $128.4 million.
During the quarter, Denny’s acquired six franchised restaurants. Franchisees opened 13 units and closed five, bringing the total number to 1,728.
For the year, Denny’s expects same-store sales growth at company restaurants between 1.5 percent and 2.5 percent, and between 1 percent and 2 percent at domestic franchised units.
Contact Lisa Jennings at [email protected]
Follow her on Twitter: @livetodineout
