Denny's said it expects to close 150 locations by the end of 2025

Denny's said it is closing 150 of its lowest-performing restaurants in an effort to turn around the brand's flagship sales.

About half of the closures will take place this year and the rest in 2025, the company said during a meeting with investors on Tuesday. Locations were not disclosed, but the restaurants represent about 10% of Denny's total.

Denny's executive vice president and chief global development officer Stephen Dunn said in some cases the restaurants are no longer in good shape.

“Some of these restaurants can be very old,” Dunn said during the investor meeting. “You think of a 70-year-old plus brand. We have many restaurants that have been around for a long time.”

Others saw traffic changes during the pandemic that have not yet reversed, he said.

On Tuesday, Denny's reported its fifth quarter of a year-over-year same-store sales decline, which is sales at locations open at least a year.

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

Still, Denny's said it has bright spots, including a value menu that boosted sales in its most recent quarter and growing sales of delivery-only brands like Banda Burrito.

Shares of Denny's Corp., based in Spartanburg, South Carolina, fell about 18% on Tuesday.