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Earnings results often give us a good indication of what direction a company will take in the months ahead. With Q3 now behind us, let’s have a look at Denny's (NASDAQ:DENN) and its peers.
Sit-down restaurants offer a complete dining experience with table service. These establishments span various cuisines and are renowned for their warm hospitality and welcoming ambiance, making them perfect for family gatherings, special occasions, or simply unwinding. Their extensive menus range from appetizers to indulgent desserts and wines and cocktails. This space is extremely fragmented and competition includes everything from publicly-traded companies owning multiple chains to single-location mom-and-pop restaurants.
The 14 sit-down dining stocks we track reported a mixed Q3; on average, revenues missed analyst consensus estimates by 0.8% Stocks have faced challenges as investors prioritize near-term cash flows, but sit-down dining stocks held their ground better than others, with the share prices up 16.7% on average since the previous earnings results.
Denny's (NASDAQ:DENN)
Open around the clock, Denny’s (NASDAQ:DENN) is a chain of diner restaurants serving breakfast and traditional American fare.
Denny's reported revenues of $114.2 million, down 2.8% year on year, falling short of analyst expectations by 2.3%. It was a weak quarter for the company, with a miss of analysts' revenue estimates, driven by lower-than-expected same-store sales growth.
Kelli Valade, Chief Executive Officer, stated, "We were pleased to have generated a 1.8% increase in Denny’s domestic system-wide same-restaurant sales** and 15.5% growth in Adjusted EBITDA* during the third quarter. Despite a persistently challenging operating environment, we remain laser-focused on providing best-in-class breakfast, an unbeatable value proposition, and convenience through off-premises options.”
The stock is up 22.7% since the results and currently trades at $10.61.
Is now the time to buy Denny's? Access our full analysis of the earnings results here, it's free.
Best Q3: First Watch (NASDAQ:FWRG)
Based on a nautical reference to the first work shift aboard a ship, First Watch (NASDAQ:FWRG) is a chain of breakfast and brunch restaurants whose menu is heavily-focused on eggs and griddle items such as pancakes.
First Watch reported revenues of $219.2 million, up 17.3% year on year, outperforming analyst expectations by 1.2%. It was a stunning quarter for the company, with a solid beat of analysts' earnings estimates.
The stock is up 12.3% since the results and currently trades at $18.77.