Why Denny's Stock Was in the Dumps Today
Shares of American diner chain Denny's (NASDAQ: DENN) were in the dumps on Wednesday after the company reported financial results for the fourth quarter of 2023. Growth is anemic, expenses are up, and profits are consequently down. And that's why Denny's stock was down 7% as of 10:30 a.m. ET and had been down as much as 10.5% earlier in the session.
Over 95% of the more than 1,600 Denny's locations are franchised, but company-owned restaurant sales still accounted for 46% of the company's revenue in 2023. Therefore, wage and food inflation are hitting its bottom line. Denny's had Q4 net income of just $2.9 million compared with net income of $12.8 million in the prior-year period.
It didn't help that sales were slower than what management had expected. Management guided for a same-restaurant-sales increase of 2.75% to 3.50%. But in Q4, same-restaurant sales were up by only 1.3%.
Source Fool.com
