Denny’s says it expects to close 150 stores by the end of 2025

Denny’s says it is closing 150 of its worst-performing restaurants in an effort to reverse the brand’s declining sales.

About half of the closings will occur this year and the remainder in 2025, the company said during an investor meeting on Tuesday. The locations were not revealed, but the restaurants represent about 10% of Denny’s total.

Stephen Dunn, Denny’s executive vice president and chief global development officer, said that in some cases, restaurants are no longer in good locations.

“Some of these restaurants may be very old,” Dunn said during the investor meeting. “You think of a brand that is over 70 years old. We have a lot of restaurants that have been around for a long time.”

Others have seen changes in traffic during the pandemic that have not yet been reversed, he said.

On Tuesday, Denny’s reported its fifth consecutive quarter of year-over-year declines in same-store sales, which are sales at locations open at least a year.

Restaurant inflation is outpacing food price inflation, making it harder for some customers to justify eating out, Denny’s said. And when they eat out, they often turn to fast-casual brands like Chipotle or fast-food chains. Denny’s said family restaurants — the category in which it competes — have lost the most customer traffic since 2020.

Still, Denny’s said it has positives, including a value menu that boosted sales in the most recent quarter and sales growth for its delivery-only brands such as Banda Burrito.

Shares of Spartanburg, South Carolina-based Denny’s Corp. fell nearly 18% on Tuesday.