Denny's (DENN) Stock Forecast & Price Target

Denny's Corp demonstrates resilience in its sales growth, with recent trends indicating improved same-store sales compared to earlier fluctuations, suggesting a stabilization of its operational model. The company's strong revenue generation from both its restaurants and franchising operations, particularly in the U.S. and Canada, supports a positive outlook on potential profitability. Additionally, the acquisition trend within the micro-cap restaurant sector may provide new opportunities for Denny's expansion, especially with the Keke's Breakfast Cafe brand contributing to its overall growth strategy.

Denny's Corporation has reaffirmed its fiscal year 2025 same-store sales (SSS) guidance, indicating expectations towards the lower end of the range, reflective of a challenging operating environment for the family dining segment. The company's second quarter results for the core Denny's brand showed a decline in domestic systemwide SSS by 1.3%, exacerbated by a notable revenue miss of $113 million, which fell short of the $116 million consensus estimate. Additionally, the unproven performance of the Keke's Breakfast Cafe brand outside Florida raises concerns about potential growth impairments, further compounded by recent sales trends indicating a deceleration of approximately 300 basis points in consumer spending.