By Jordan Valinsky, CNN
New York (CNN) — Denny’s is closing about 30 more restaurants than previously announced as part of the struggling diner chain’s plans to jumpstart growth.
The additional closures come after Denny’s announced last year it was shutting the doors for 150 locations. In an earnings release Wednesday, the company revealed it closed 88 locations last year and will shutter between 70 and 90 locations in 2025, bringing the figure closer to 180 closures.
A specific list of locations wasn’t immediately revealed. However, Denny’s said some of the diners closing were selected because they have expiring leases, have been open for more than 30 years — making them too expensive to remodel — or are in areas that have become unprofitable.
“In any mature brand, when restaurants have been open that long, it is natural that trade areas can shift over time,” said Denny’s Chief Financial Officer Robert Verostek. “Accelerating the closure of lower-volume restaurants will improve franchisee cash flow and allow them to reinvest into traffic-driving initiatives like our tested and proven remodel program.”
Remodeled restaurants did indeed see a 6.5% increase in traffic over the year. However, the company renovated only 23 locations in 2024, which is a small portion of the 1,300 locations it has across the United States.
Denny’s has struggled in recent years because of inflation and rising food costs. Sales in January and February nosedived following a strong end to 2024 because of “consumer uncertainty that we are seeing at the moment,” Verostek said.
A new inflation report shows that consumer prices rose 0.5% from December to last month, bringing the annual inflation rate to 3% for the 12 months that ended in January. That’s causing a lot of “volatility here in February” for Denny’s, Verostek said, and as a result the company released “really ultra conservative guidance” for the year.
Shares of Denny’s (DENN) closed nearly 25% lower Wednesday and are down about 50% since a year ago.
The-CNN-Wire
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