Denny's Corporation has recently released its 10-K report, offering a comprehensive insight into its financial performance and operations. The company, headquartered in Spartanburg, South Carolina, operates franchised full-service restaurant chains under the Denny's and Keke's Breakfast Cafe brand in the United States and internationally. In 2023, Denny's reported total operating revenue of $463,922, with company restaurant sales accounting for $215,532 and franchise and license revenue at $248,390.
The company's operating income for the fiscal year ended December 27, 2023, was $52,823, representing 11.4% of total operating revenue. This figure showed a decrease from the previous year's operating income of $60,614, which accounted for 13.3% of the total operating revenue. Denny's net income for 2023 was $19,945, reflecting a decline from the previous year's net income of $74,712.
In terms of sales performance, Denny's reported a 2.7% increase in company same-store sales compared to the prior year, while domestic franchised same-store sales saw a 3.6% increase. The company's average unit sales for Denny's and Keke's also showed positive growth.
The 10-K report also highlighted the company's expansion and contraction in terms of restaurant units. By the end of 2023, Denny's had 65 company restaurants and 1,508 franchised and licensed restaurants. Meanwhile, Keke's, which was acquired in 2022, had 8 company restaurants and 50 franchised and licensed restaurants by the end of 2023.
The report delved into the breakdown of costs, with a focus on company restaurant sales and franchise operations. Notably, costs of company restaurant sales as a percentage of company restaurant sales were 87.0% in 2023, compared to 89.8% in 2022 and 84.0% in 2021. Similarly, costs of franchise and license revenue as a percentage of franchise and license revenue decreased to 49.3% for 2023 from 52.7% in 2022.
Denny's also detailed its other operating costs and expenses, including general and administrative expenses, depreciation and amortization, goodwill impairment charges, and operating (gains), losses, and other charges. The report showed an increase in general and administrative expenses by $10.6 million in 2023, primarily due to compensation increases and administrative costs related to Keke's. Additionally, goodwill impairment charges of $6.4 million were reported in 2023, primarily related to the Keke's acquisition.
The market has reacted to these announcements by moving the company's shares 0.8% to a price of $9.25. If you want to know more, read the company's complete 10-K report here.
