American table service diner-style restaurant chain Denny’s has announced plans to close 150 restaurants by the end of 2025 due to a fall in revenue and a significant shift in consumer habits.
The Los Angeles Times reports that the closures represent a 10% reduction in locations.
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The company’s third-quarter earnings report for 2024 revealed lower-than-expected results, with shares plummeting almost 50% during the year
50 restaurants are expected to be closed in 2024, with 100 more to shutter in the following year.
Denny’s executive vice-president Steve Dunn stated that the company is targeting locations that are not performing well.
Denny’s reported a decrease in total operating revenue from $114m in the third quarter of the previous year to $111m in the same quarter of 2024. Operating income also saw a decline, dropping to $11m from $14m in the same period.
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By GlobalDataThe brand concluded the quarter with $272.0m of total debt, including $261.0m of borrowings under its credit facility.
The company’s portfolio includes the Denny’s brand and the Keke’s brand.
Denny’s CEO Kelli Valade said: “Our third quarter sales results directly reflect ongoing brand investments and dedicated focus on value that resulted in outpacing the category. Denny’s domestic system-wide same-restaurant sales outperformed the BBI Family Dining index for the third consecutive quarter driven by the relaunch of our fan favourite $2-$4-$6-$8 value menu and the continued expansion of off-premises with our third virtual brand, Banda Burrito.
“Keke’s also experienced a significant sequential improvement in same-restaurant sales as our initiatives to enact foundational marketing strategies and expand the alcohol programme continued our efforts to close the gap to the competitive set.”
As of 25 September 2024, there were 1,525 global Denny’s restaurants,1,464 of which are franchised and licensed and 61 company-operated.
The Keke’s brand, primarily located in Florida, comprises 61 restaurants, 50 franchised and 11 company-operated.
