The 10-second takeaway
For the quarter ended Dec. 28 (Q4), Denny's met expectations on revenue and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank and GAAP earnings per share increased significantly.
Margins expanded across the board.
Denny's notched revenue of $130.2 million. The five analysts polled by S&P Capital IQ hoped for revenue of $131.6 million on the same basis. GAAP reported sales were 4.2% lower than the prior-year quarter's $135.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.96. The seven earnings estimates compiled by S&P Capital IQ averaged $0.08 per share on the same basis. GAAP EPS of $0.95 for Q4 were much higher than the prior-year quarter's $0.02 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 35.6%, 120 basis points better than the prior-year quarter. Operating margin was 10.2%, 250 basis points better than the prior-year quarter. Net margin was 70.7%, 6,870 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $127.1 million. On the bottom line, the average EPS estimate is $0.06.
Next year's average estimate for revenue is $503.3 million. The average EPS estimate is $0.29.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 411 members rating the stock outperform and 39 members rating it underperform. Among 111 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 106 give Denny's a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Denny's is buy, with an average price target of $5.14.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.