Denny’s (NASDAQ:DENN) Misses Q3 Sales Expectations, But Stock Soars 46.5%

Diner restaurant chain Denny’s (NASDAQ:DENN) fell short of the markets revenue expectations in Q3 CY2025 as sales only rose 1.3% year on year to $113.2 million. Its GAAP profit of $0.01 per share was 90% below analysts’ consensus estimates.

Is now the time to buy Denny’s? Find out in our full research report.

• Denny’s will be purchased by private equity investment company TriArtisan Capital Advisors, investment firm Treville Capital and Yadav Enterprises (one of Denny’s largest franchisees) in a deal worth $620 million, including debt. Denny’s shareholders will receive $6.25 per share in cash for each share of common stock they own, a 52% premium to Denny’s closing stock price Monday.

• Revenue: $113.2 million vs analyst estimates of $117 million (1.3% year-on-year growth, 3.2% miss)

• EPS (GAAP): $0.01 vs analyst expectations of $0.10 (90% miss)

• Adjusted EBITDA: $19.32 million vs analyst estimates of $20.17 million (17.1% margin, 4.2% miss)

• Operating Margin: 9.2%, down from 10.5% in the same quarter last year

• Locations: 1,459 at quarter end, down from 1,586 in the same quarter last year

• Same-Store Sales fell 2.9% year on year (0.1% in the same quarter last year)

• Market Capitalization: $211.7 million

Kelli Valade, Chief Executive Officer, stated, “Our third quarter progress on strategic initiatives demonstrates our ability to remain agile and focused on what is within our control amid a choppy industry backdrop. These achievements are the direct result of our incredible teams and franchisees maintaining their unwavering commitment to our brands and our guests.”

Open around the clock, Denny’s (NASDAQ:DENN) is a chain of diner restaurants serving breakfast and traditional American fare.

Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years.

With $457.2 million in revenue over the past 12 months, Denny’s is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.

As you can see below, Denny’s demand was weak over the last six years (we compare to 2019 to normalize for COVID-19 impacts). Its sales fell by 4.1% annually as it closed restaurants.

This quarter, Denny’s revenue grew by 1.3% year on year to $113.2 million, falling short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 7.7% over the next 12 months, an acceleration versus the last six years. This projection is above the sector average and indicates its newer menu offerings will spur better top-line performance.