News Summary
Denny’s Corp. is planning to close 70 to 90 restaurants by the end of 2025 as the diner chain faces declining revenues and operating income. The company aims to focus on better-performing restaurants while also opening new franchises. This strategic move follows disappointing quarterly earnings and a significant drop in stock prices, prompting changes to improve financial stability amidst shifting dining habits due to rising inflation.
Spartanburg in the Spotlight: Denny’s Faces Big Changes
In a surprising turn of events, Denny’s Corp., that classic diner chain known for its comforting breakfast options, is set to shake things up. The company recently announced plans to shutter between 70 and 90 of its restaurants nationwide by the end of 2025—a move that will impact about 10% of the total Denny’s diners across the U.S. This follows the closure of 88 locations in 2024.
Diner Dynamics: The Revenue Rollercoaster
What’s driving this decision? Well, the diner chain has seen some challenging times as operating revenue slipped to $452.3 million in 2024, down from $463.9 million the previous year. The decline doesn’t stop there; operating income also took a hit, falling to $45.3 million from $52.8 million in 2023. With five consecutive quarters of year-over-year declines in same-store sales, it’s clear Denny’s is feeling the pinch.
Stock Market Ripple Effects
This new strategy comes on the heels of a disappointing quarterly earnings report that surprised analysts and led to an approximate 18% drop in Denny’s stock. Initially, the shares dropped nearly 25% to around $5.12, even slipping to a low of $4.86. Thankfully, it seems to have jumped back to $5.32, but the turbulence has left investors feeling uneasy.
New Directions Amidst Closures
Despite the unfortunate closures, Denny’s is not entirely throwing in the towel. In 2024, the company managed to open 14 new franchises and has its sights set on launching 25 to 40 more in conjunction with the phased-out locations. The idea behind this wave of closures is to focus on stronger-performing restaurants and to remodel the older spots that still have potential.
Inflation & Dining Decisions
In today’s economic climate, inflation has made dining out a hard sell for many families. With the rising costs of everyday essentials, customers are having to think twice about where and how often they eat out. Denny’s is hoping to combat this trend by aiming to boost its average unit volumes from $1.9 million to $2.2 million per store, ultimately reinforcing its position in the market.
The Road Ahead for Denny’s
Denny’s currently operates a total of 1,358 locations across the United States and 167 international restaurants, with a significant presence in Canada. In its home state of South Carolina, Denny’s runs 11 locations, including two in its corporate headquarters city of Spartanburg. Some of the locations marked for closure may include older restaurants that have served their communities for many years.
Although these changes may come as a shock to many fans of the diner chain, the hope is that this strategic pivot will help Denny’s to not only survive but thrive as it looks to build a stronger overall system. With the customer base evolving, keeping a keen eye on shifting dining habits is essential if Denny’s wants to stay relevant and continue its legacy as a beloved diner destination.
Conclusion
As the diner chain navigates these turbulent times, only time will tell how these changes will impact the Denny’s we know and love. Whether you’re a fan of their famous Grand Slam or just enjoy a good cup of coffee, it’s worth keeping an eye on Denny’s as they make these important adjustments!
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Additional Resources
- Post and Courier: Denny’s Restaurant Closures
- Wikipedia: Denny’s
- Greenville Online: Why is Denny’s Closing?
- Google Search: Denny’s closures
- Finance Buzz: Denny’s Restaurant Closures
- Encyclopedia Britannica: Diner
- Independent Mail: What’s Open & Closed on July 4th
- Google News: Denny’s 2024
- NRN: Denny’s Closures by 2025
