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ABOUT THE COMPANY
Denny’s Corporation is a restaurant business, subsidiary of Denny's Inc., that resides in the Consumer Discretionary sector, in the sub sectors of Restaurants and Bars as well as Leisure Facilities and Services. The corporation operates under NASDAQ markets as DENN. Known across the country as America’s Diner, and internationally as the Local Diner, Denny’s is famous for its breakfast all-day items, but also offers lunch and dinner items as well as beverages, appetizers, and desserts. Most popular items at the restaurants include burgers, salads, and sandwiches. In 2019, the company transitioned from a 90% franchised business model to one that is 96% franchised.
They operate in a business-to-consumer business model, with a target market segment in general of consumers loving fast food, with a more specific appeal directed at consumers earning mid to high incomes. In recent history, Denny's has changed some of their management positions; the current Executive VP/Chief Financial Officer was recently promoted in the corporation in 2021, and the current Executive VP/Chief Learning Officer was the previous secretary/general counsel.
KEY COMPETITORS
ARAMARK
DARDEN RESTAURANTS
BLOOMIN' BRANDS
TEXAS ROADHOUSE
Similarities between these companies and Denny's include the aspects of the full-service restaurant business, and being both for casual dining as well as leisure, while the main difference in competitors lies in the size of the corporations (and subsidiaries), and whether they also operate bars and leisure facilities.
LONG-TERM CHANGES
Any sector serving consumers face-to-face in a business-to-consumer model, and even corporations operating online, has seen extremely disruptive changes in the past 2.5 years due to the COVID-19 pandemic and the resulting changes in consumer behavior. Dine-in focused services have struggled the most, but Denny's has caught back up to pre-COVID levels of revenue by incorporating virtual kitchens and remodeling franchised locations. However, there are still some disruptive forces that could have negative long-run effects.
Labor Availability - the reduced amount of those in the work force is making it difficult for Denny's maintain effective operating hours.
Dine-in Restrictions - though COVID restrictions are drastically reduced compared to 2020 and 2021, the revolving pop-ups of variants during winter and holiday seasons makes it difficult to maintain constant rules on restrictions for restaurants. Furthermore, it creates volatility for investors, as it can't always be predicted when there will be an outbreak and revenues may drop.
Environmental/Social Impact - Denny's is implementing green initiatives aimed at reducing the environmental impact at a corporate and restaurant level. This will be observed in the coming decade by reducing electric usage, decreasing use of natural gas, and implementing programs in each restaurant to decrease wastewater while still observing food safety standards.
SUPPLY CHAIN
Key SUPPLIERS of direct food materials include Coca Cola, Hormel, Stampede Meat, and McCormick. Other suppliers for the corporation include Sanderson Farms, Inc., Pactiv Evergreen, Monde Nissin Corp., and Beyond Meat Inc. Customers are usually segmented as those desiring fast-food style dining at a sit-down full service restaurant.
KEY METRICS
This figure shows the company's income statement of operations from the fiscal year 2019 to the end of the fiscal year of 2021. Main rows to pay attention to are Denny's revenue, company sales, total costs of sales, operating income, and the total net income (loss).
As of the end of the 2021 fiscal year, Denny's operating revenue finished at just over $398k, about a 38% increase from the operating revenue of 2020, but not quite recovered from the COVID impact that hit after 2019 (to be back at 2019 revenue levels, the revenue will need to increase over 26%).
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