Adjusted company restaurant operating margin was $6.7 million or 11.5% of company restaurant sales, down from 12.9% prior year, impacted by product cost increases and new cafe inefficiencies.
Adjusted EBITDA was $18.8 million, and adjusted net income per share was $0.09.
Adjusted franchise operating margin was $30.0 million or 50.7% of franchise and license revenue, slightly down from prior year.
Company restaurants delivered flat same-restaurant sales despite macroeconomic pressures.
Denny's opened 3 restaurants and closed 10 franchise restaurants with average unit volumes of approximately $1 million during the quarter.
Denny's reported Q2 2025 domestic system-wide same-restaurant sales of negative 1.3%, a 170 basis point sequential improvement from Q1.
General and administrative expenses increased slightly to $21.4 million, but corporate administrative expenses decreased by approximately 3.5%.
Keke's Breakfast Cafe delivered strong Q2 same-restaurant sales growth of 4%, outperforming the BBI Family Dining Index in Florida by over 220 basis points.
Off-premise sales contributed a 1.5% improvement in same-restaurant sales, representing 21% of total sales.
System guest check average increased approximately 3% year-over-year, primarily due to carry-over pricing.
Applebee's First Positive Traffic in 2 Years Driven by 2 for $25
Applebee's achieved positive comparable sales of 4.9%, driven by a significant increase in traffic, the first since Q1 2023.
Traffic growth was supported by the 2 for $25 value platform, which the company is leaning into as a primary marketing message.
Introduction of new menu items each quarter, including Bourbon Street Cajun Pasta, New Skillets & Steak, and Chicken Parmesan Fettuccine, to sustain traffic and sales growth.
Operational processes for new menu rollouts are well-tested and manageable, with franchisees supporting frequent updates.
Value mix decreased slightly to 30%, but remains above historical levels, with positive guest feedback and strong traffic signals.
Adjusted EBITDA loss improved to $13 million, exceeding the high end of guidance by over $3 million.
Cash and cash equivalents ended at $33 million; inventories down 21% year-over-year.
Operating cash use narrowed to $9 million in Q2, down sequentially.
Q2 gross margin was 40.7%, down from 50.5% a year ago due to promotional activity, inventory adjustments, channel mix shifts, and increased freight and duty costs.
Q2 marketing expense was $9 million or 21% of revenue, down from last year.
Q2 net revenue totaled $40 million, at the high end of guidance.
SG&A expenses decreased by 28% year-over-year, driven by lower payroll and occupancy costs from distributor transitions and store closures.
Adjusted operating margins declined to 3.5% from 6.0% last year, impacted by inflation in COGS (3.3%), labor (3.4%), health insurance, and higher operating expenses.
GAAP diluted earnings per share were $0.29, up from $0.28 last year; adjusted diluted EPS was $0.32, above guidance range of $0.22 to $0.27 but down from $0.45 last year.
Net debt was $867 million with leverage at 2.7x net debt to adjusted EBITDA and 4.1x lease adjusted net leverage; company aims to reduce lease-adjusted leverage below 3.0x.
Quarterly dividend declared at $0.15 per share; share repurchases are not planned currently.
Total revenues for Q2 2025 were $1 billion, slightly up from $999 million last year, driven by restaurant openings and closures.
U.S. comparable restaurant sales declined by 10 basis points, with traffic down 200 basis points, but results exceeded company expectations.
Adjusted EBITDA was $44.4 million, up 26% year-over-year, primarily due to higher gross profit partially offset by increased SG&A expenses.
Adjusted gross margin improved to 46.9% from 45.9% in the prior year period, driven by lower input costs, higher yields, and reduced quality costs.
Adjusted SG&A was 30.1% of net sales, down from 31.0% the prior year, with media spend increasing to 15% of net sales from 12.2%.
Capital spending for Q2 was $33.4 million, with operating cash flow of $33.9 million and cash on hand of $243.7 million at quarter end.
Household penetration grew 11% year-over-year to 14.4 million households, with MVPs (most valuable pet parents) growing 18% to 2.2 million households, representing 70% of sales.
Logistics costs remained stable at 5.7% of net sales compared to 5.8% last year.
Second quarter net sales were $264.7 million, up 12.5% year-over-year, driven primarily by volume growth.
Adjusted EBITDA increased 9.7% to $150.2 million with a margin rate of 12.4%, up 30 basis points year-over-year.
Comparable store sales increased by 0.4%, marking the first quarterly increase since Q4 fiscal 2022.
Diluted earnings per share increased by 11.5% to $0.58 compared to $0.52 in the same period last year, reaching the high end of expectations.
Effective tax rate increased to 21.8% from 19.8% last year due to decreased excess tax benefits from stock-based compensation.
General and administrative expenses increased 2.6% to $69.4 million, with a decrease in other operating expenses partially offsetting personnel expense increases.
Gross profit rose by 8.5% compared to the same period last year, driven by a 7.1% increase in sales and a 60 basis points improvement in gross margin rate to 43.9%.
Inventory increased 7% sequentially and 17% year-over-year, driven by timing of receipts and support for new Seattle distribution center.
Net interest expense increased 62.3% to $1.1 million due to lower interest capitalized partially offset by higher interest income.
Preopening expenses decreased 51.8% to $5.1 million due to fewer store openings compared to last year.
Sales for the quarter rose by 7.1% to $1.214 billion.
Selling and store operating expenses increased by 10.2% to $376.2 million, primarily due to $33.8 million for new stores.
Unrestricted liquidity ended at $876.9 million, including $176.9 million in cash and $700 million available under ABL facility.
Adjusted diluted EPS increased 28% to $1.19 per share, significantly outpacing adjusted EBITDA growth due to accretive share repurchases.
Adjusted gross profit grew 5% to $1.8 billion, supported by volume growth, improved cost of goods, disciplined inventory management, and increased private label penetration.
Net sales increased 3.8% to $10.1 billion, driven by 0.9% case volume growth and 2.9% food cost inflation and mix impact.
Operating cash flow increased by $104 million to $725 million year-to-date, supporting record capital investments and $273 million in share repurchases.
US Foods delivered record second quarter adjusted EBITDA of $548 million, a 12% increase year-over-year, with an all-time high adjusted EBITDA margin of 5.4%, up 40 basis points.
Adjusted earnings per share increased 32% year-over-year, helped by a 5% lower average share count.
Adjusted EBITDA grew 28% year-over-year, driven by revenue outperformance and disciplined expense management.
Adjusted fixed operating expenses increased 11% year-over-year, impacted by performance-based compensation, cloud costs, and a legal settlement.
Alternative accommodations room nights grew 10%, outpacing core hotel business growth.
Booking Holdings reported strong Q2 2025 results with room nights reaching 309 million, an 8% year-over-year increase, exceeding prior expectations.
Free cash flow was $3.1 billion in the quarter, with ending cash and investments at $18.2 billion, up from $16.1 billion in Q1.
Gross bookings increased 13% year-over-year and revenue grew 16%, both above the high end of guidance.
Marketing expenses increased 10% year-over-year but were a source of leverage due to lower brand marketing and higher direct mix.
Share repurchases totaled $1.3 billion and dividends $300 million in the quarter.
Transformation program savings of $45 million were realized in-quarter, with $150 million expected in 2025 and total run rate savings of $350 million anticipated.
Dafinchi
