The chain plans to close dozens of additional locations.
Closeout sales averaged about 1.1 million.
The company is closing locations to improve overall profitability.
Nostalgia only takes people so far.
You may have been going to a restaurant since you were a kid, or even take your kids there once in a while, but you won’t eat there regularly if the quality and value of the food doesn’t match or exceed your other options.
Nostalgia can drive people through the chain door; just can’t keep people coming back.
“The reason brands rely so heavily on blasts from the past is that nostalgic marketing campaigns offer consumers an escape from constant economic uncertainty, negative headlines and political turmoil. In response, many people are turning to the comforts of the familiar to help them navigate an uncertain and rapidly changing world,” said ErichoPublicm, head of Remiestlations and Remiestlationsl.com Remiestlationsl.com Author Erik Yaverbaum.
Denny’s certainly fits the “blast from the past” model, but the nostalgia hasn’t been enough to keep the brand relevant. In response to declining sales, the chain has closed dozens of restaurants and plans to close dozens more in an effort to become a more profitable company.
It is important to note that while the Denny’s brand has struggled, it is still profitable. The chain recently shared its second quarter results.
“Total operating income was $117.7 million, compared to $115.9 million in the year-ago quarter. This increase was primarily driven by additional Keke business units and partially offset by the company’s previously announced strategy to intentionally close lower-volume Denny’s franchised restaurants to improve the overall health of the brand,” the company said in its earnings report.
The overall numbers were mixed.
Total operating income amounted to 117.7 million. USD, and total operating income – 8.6 million. USD.
Compared to the year-ago quarter, Denny’s domestic same-restaurant sales decreased 1.3%.
Keke’s domestic same-restaurant sales increased 4% compared to the prior-year quarter.
Adjusted franchise operating margin was $30.0 million. USD, or 50.7% of franchise and license revenue, and the company’s adjusted restaurant operating margin was $6.7 million. USD or 11.5% of the company’s restaurant sales.
Net income was 2.5 million. USD or USD 0.05 per diluted share.
Adjusted net income and adjusted net income per share were $4.8 million, respectively. USD and USD 0.09.
Adjusted EBITDA was 18.8 million.
Denny’s has closed dozens of restaurants but remains profitable.Justin Sullivan /Getty Images” loading=”lazy” height=”540″ width=”960″ class=”yf-1gfnohs loader”/>
Denny’s has closed dozens of restaurants but remains profitable.Justin Sullivan and Getty Images.
Denny’s CEO Kelli F. Valade informed shareholders of her company’s plan to close more restaurants during its second-quarter earnings call.
“I also want to take a moment to provide an update on our previously announced strategy to close underperforming restaurants and return to pre-pandemic growth to slightly positive growth in the coming years. The surgical and methodical approach that began in 2023 and will be completed by the end of this year was specifically designed to optimize and improve the overall health of the franchise system for stable growth, returning to net20 to 6,” she shared.
She noted that it worked.
“Rationalizing the portfolio was the right thing to do, and we are seeing the results we wanted and expected from the process. It has already resulted in an increase in franchise AUV (average unit volume) of approximately 5%, or nearly $100,000 in AUV,” she added.
Store closings aren’t Denny’s only strategy. The company also tried to increase profitability in other ways.
“Another important step we are taking to improve not only the lower quintile restaurants but the entire portfolio is to protect margins and leave no stone unturned,” Valade said.
More restaurants
Those efforts also paid off.
“Currently, our margin improvement efforts have already resulted in significant savings through reduced food and non-food costs and waste savings. Savings have come from supplier negotiations, product specification changes, recipe changes, menu improvements, and operational procedure changes,” she shared.
Total Planned Closure: Denny’s has announced plans to close 70 and 90 places 2025, adding to 88 closures from 2024
Reason for closure: The closings are part of a strategy to boost profitability by shedding underperforming restaurants. Source: Nation’s Restaurant News.
Average unit volume closed in llocations: Closed restaurants had lower average unit volume 1.1 million dollars and was opened at an average of approx 30 years old. Source: Restaurant Dive
Future Openings: Despite the closure, Denny’s plans to open between 25 and 40 new seats In 2025, half should be Denny’s and the other half Keke’s Breakfast Café. Source: Denny’s earnings call
Denny’s has not released their list locations will be closedand some shutdowns occurred without warning.
Related: Coca-Cola ditches popular soda-flavored staples, restaurants
This story was originally reported by TheStreet in 2025. on October 28, where it first appeared in the restaurants section. Add TheStreet as a preferred source by clicking here.
