Family-dining brand’s same-store sales bouncing back from coronavirus low of 80% weekly decline
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Denny’s Corp. on Wednesday had about 82% of its domestic restaurants operating, most with takeout and delivery, streamlined menus and reduced operating hours, as the brand dealt with coronavirus restrictions, the company said Thursday.
The Spartanburg, S.C.-based family-dining chain, reporting earnings for the first quarter, said domestic same-store sales declined 6.3% in the quarter but had dipped to a low of down 80% in the final week of the period, which ended March 25.
“While the Denny’s brand had a positive start to the year delivering solid sales results through February, the dramatic and sudden impact of COVID-19 and related restrictive government mandates weighed on the final weeks of the fiscal first quarter,” said John Miller, Denny’s CEO, in a statement.
“As restaurant operations were being limited to off-premise sales channels, we implemented streamlined menus, 'Dine-Thru' curbside service programs and shareable family meal packs in a matter of days,” Miller said.
Denny’s also posted same-store sales declines for each of the weeks since the close of the first quarter. They included for the weeks ended:
April 1: down 79%.
April 8: down 78%.
April 15: down 76%.
April 22: down 72%.
April 29: down 72%.
May 6: down 68%.
The company said 312 Denny's restaurants remained temporarily closed, including 272 domestic franchised units and 40 international franchised locations.
“With easing restrictions for dine-in service, 521 Denny's restaurants have reopened dining rooms with capacity limitations in 21 states,” the company said, noting that the brand anticipated see some labor inefficiencies and increased cleaning and supply costs.
Miller said the company was working to secure financial relief for its franchisees, including the deferral of remodels until further notice, deferral of royalty and advertising fees for week 11 of the 2020 fiscal year, abatement of such fees for weeks 12 and 13 of the 2020 fiscal year, and a 12-week lease deferral for franchisees operating in properties owned by the company.
Denny’s secured rent relief in the form of abatements or deferrals for about 75% of the leases in which the company is a lessee, including where the company subleases to franchisees, and would extend the relief as a pass through.
For the first quarter ended March 25, Denny’s net income was $9 million, or 16 cents a share, down from $15.5 million, or 24 cents a share, in the same period last year. Revenues fell to $96.7 million from $151.4 million in the prior-year quarter.
As of March 25, Denny's had 1,695 franchised, licensed and company restaurants around the world including 147 restaurants in Canada, Puerto Rico, Mexico, the Philippines, New Zealand, Honduras, the United Arab Emirates, Costa Rica, Guam, Guatemala, the United Kingdom, El Salvador, Indonesia and Aruba.
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