Shares of Denny’s (DENN) are trading near a 52-week low after the U.S. restaurant chain announced that it plans to close 150 locations over the next year.
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Management also said that they are considering changing its round the clock operating hours that keep its restaurants open 24-hours a day, seven days a week. A total of 50 Denny’s restaurants will close by the end of 2024, while the remaining 100 will be shuttered in 2025.
Denny’s said it will have 1,375 restaurant locations remaining once the 150 outlets are closed. The locations of the restaurant closures was not made public by the company. However, management said they are looking to close underperforming locations that are hurting Denny’s financial performance.
Poor Financial Results
News of the restaurant closures comes a day after Denny’s reported poor quarterly financial results that sent the company’s share price down as much as 20% in intraday trading on October 22. The company’s stock has now declined 50% this year and is trading near a 52-week low of $5.37 per share.
In addition to the restaurant closures and potential changes to its hours of operation, Denny’s has also reduced its menu items, taking the number of available options down to 46 from 97. The company has struggled to recover from the Covid-19 pandemic when many of its restaurants were forced to temporarily close or operate at reduced capacity.
Is DENN Stock a Buy?
Denny’s stock has a consensus Moderate Buy rating among six Wall Street analysts. That rating is based on three Buy and three Hold recommendations issued in the last three months. There are no Sell ratings on the stock. The average DENN price target of $10 implies upside potential of 84.67% from current levels.
