Unpacking Q3 Earnings: Denny's (NASDAQ:DENN) In The Context Of Other Sit-Down Dining Stocks

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.

Is now the time to buy First Watch? Access our full analysis of the earnings results here, it's free.

Weakest Q3: The ONE Group (NASDAQ:STKS)

Doubling as a hospitality services provider for hotels and resorts, The One Group Hospitality (NASDAQ:STKS) is an upscale restaurant company that operates STK Steakhouse and Kona Grill.

The ONE Group reported revenues of $76.88 million, up 5.3% year on year, falling short of analyst expectations by 7.7%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and a miss of analysts' revenue estimates.

The ONE Group had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is up 23.6% since the results and currently trades at $5.65.

Read our full analysis of The ONE Group's results here.

Chuy's (NASDAQ:CHUY)

Known for its ‘Big As Yo' Face’ burritos, Chuy’s (NASDAQ:CHUY) is a casual restaurant chain that specializes in Tex-Mex fare, which combines elements of traditional Mexican cuisine with Southern American cooking.

Chuy's reported revenues of $113.5 million, up 6.4% year on year, surpassing analyst expectations by 1.6%. It was a very strong quarter for the company, with an impressive beat of analysts' revenue estimates. To finish off the positives, the company also raised full year EPS guidance.

Chuy's pulled off the biggest analyst estimates beat among its peers. The stock is up 1.4% since the results and currently trades at $34.31.

Read our full, actionable report on Chuy's here, it's free.

Kura Sushi (NASDAQ:KRUS)

Known for its conveyor belt that transports dishes to diners, Kura Sushi (NASDAQ:KRUS) is a chain of sushi restaurants serving traditional Japanese fare with a touch of modernity and technology.

Kura Sushi reported revenues of $51.48 million, up 30.9% year on year, in line with analyst expectations. It was a mixed quarter for the company, with an impressive beat of analysts' gross margin estimates but a miss of analysts' earnings estimates.

Kura Sushi delivered the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 28.2% since the results and currently trades at $95.36.

Read our full, actionable report on Kura Sushi here, it's free.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.

The author has no position in any of the stocks mentioned