Denny’s Corp. has closed about half the 150 underperforming restaurants it plans to shutter through 2025 to improve its portfolio, the company said during an investor day Tuesday.
In what the Spartanburg, S.C.-based company, parent to the Denny’s diner and Keke’s Breakfast Cafe brands, said was “portfolio optimization,” it has closed about 75 of the Denny’s restaurants in its effort to increase average unit volumes from $1.9 million to a target of $2.2 million per store, executives said.
Robert Verostek, Denny’s chief financial officer, said about a third of that improvement should come from cleaning up the lower-performing fifth of the company’s restaurants.
Denny’s did not outline where the future closures would occur.
The company also has worked on increasing traffic by bringing back the $2-$4-$6-$8 value menu, which debuted with a “Beetlejuice” tie-in and highlighting the Lumberjack Slam along with the regulator Grand Slam, said Kelli Valade, Denny’s CEO.
On the Keke’s side, Denny’s will opened its first restaurant in Colorado two weeks ago and has plans for California and Texas, Valade said.
Newer locations can open with a full cocktail menu, and about 80% of the existing Keke’s system now has wine-based sangria or mimosas as part of the beverage offerings.
For the third quarter that ended Sept. 25, Denny’s net income slipped to $6.5 million, or 12 cents a share, from $7.9 million, or 14 cents a share, in the same period a year ago. Revenues were $111.8 million, down from $114.2 million in the same quarter last year.
Denny's systemwide same-store sales were down 0.1% in the third quarter, compared to the equivalent period in 2023, including down 0.1% at domestic franchised restaurants and down 0.4% at company restaurants.
As of Sept. 25, Denny’s Corp. had 1,586 restaurants, 1,514 of which were franchised and licensed restaurants and 72 of which were company-operated under the Denny’s and Keke’s brands. Of the 1,525 Denny’s restaurants, 1,464 were franchised and licensed restaurants, and 61 were company-operated. Of the 61 Keke’s restaurants, 50 were franchised restaurants, and 11 were company-operated.
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