After some tumultuous years, the restaurant and food service industry has started to pick back up.
People are once again contributing to the food service industry by going to restaurants, yet they remain value-conscious by opting for more affordable rather than costly fine dining options.
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According to the National Restaurant Association, restaurant sales are up, and by the end of 2024, they are forecasted to reach $1 trillion.
However, competition is stronger than ever, with analysts predicting 45% higher competition than last year, which could explain why ten popular restaurant chains filed for bankruptcy this year alone.
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Denny’s ‘Grand Slam’ hit falls short of all expectations
Denny’s (DENN) is a classic American diner chain that has been feeding Americans its famous Grand Slams and fluffy pancakes for decades.
Although a nostalgic favorite known for its yellow and red sign that can be seen on any major road in the U.S., the diner chain has hit an all-time low by reporting disappointing earnings and falling short of analysts’ expectations in recent quarters.
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According to Denny’s Q2 earnings report for 2024, revenues fell by nearly 1%, profit margin decreased by 7.3%, and net income dropped by over 58% compared to the previous fiscal year.
Denny’s also failed to meet analysts’ expectations, with revenues missing by 2.6% and EPS by 55%.
As of Thursday’s market pen, the company is up nearly 3% but has decreased by nearly 39% YTD.
Denny’s hits up an old ex in hopes of returning to its glory days
On Sept. 23, Denny’s announced a new leadership transition, naming Christopher Bode President and Chief Operations Officer (COO), which is set to take effect on Sept. 30.
Bonde will succeed the current Denny’s COO, Alex Williams, who only served a little over a year after being hired in May last year.
However, Bode is a very familiar face to the company. He previously served as Denny’s COO from 2014 until his departure in 2022.
Bode will oversee Denny’s operations, marketing, finance, and HR for both corporate and franchise restaurants.
“Chris’s deep operational expertise and intimate understanding of our franchise community… will empower us to not only remain competitive but to lead the industry with innovation and excellence,” said Denny’s CEO Kelli Valade in the announcement.
Rehiring former executives has become a new trend
As unusual as rehiring a former executive may seem, various companies have made these leadership changes, rehiring higher-ups years or even days after their departure.
Sam Altman, the founder and CEO of OpenAI, was fired by the company’s board of directors on Nov. 17, 2023, only to have his title reinstated three days later.
Bob Iger, CEO of The Walt Disney Company (DIS) , announced his retirement in 2020 after a 15-year run. However, after his successor failed to fulfill the role, Iger was rehired as CEO in 2022 and offered a contract extension a year later until 2026.
The co-founder of Twitter (TWTR) , Jack Dorsey, served as the company’s CEO in 2006 until he was fired two years later. He returned to his position in 2015, only to leave again in 2021.
Steve Huffman, the co-founder of Reddit (RDDT) , became CEO of the company in 2005 until the new leadership team pushed him out in 2009, but he returned as CEO in 2015.
Elliott Hill served as Nike’s (NKE) President-Consumer and Marketplace in 2018 until he retired in 2020 after serving 32 years with the company. But his life as a retiree didn’t last long, as he was recently announced as the company’s new CEO.
“Rehiring past executives can be a strategic initiative for organizations, especially when hiring practices or shifts in culture have led to a divergence from the company’s overall objectives. A returning executive can help recalibrate and correct any misalignments by bringing a fresh yet familiar perspective, steering the organization back on course and repairing potential gaps in leadership or team dynamics,” said Brian Smith, Founder of IA Business Advisors.
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