Why Denny's Stock Crashed to Within Inches of Its Lowest Price in Over 10 Years Today
Shares of restaurant company Denny's (NASDAQ: DENN) crashed on Wednesday after reporting financial results for the fourth quarter of 2024 and providing a business update -- an update that greatly troubled investors. As of 3:15 p.m. ET, Denny's stock was down 22% and was within a few percentage points of hitting its lowest price in over a decade.The big-picture problem is that many Denny's locations aren't performing well, leading to closures. The company closed 88 underperforming restaurants in 2024. These averaged annual sales volume of under $1.1 million, which is quite low for a restaurant company and makes it hard for franchisees to profit. But there are unfortunately many other poor performers in the system. That's motivating management to close another 70 to 90 restaurants in 2025, which is more than expected.Turning to the financial results, the numbers in isolation didn't necessarily look dire for Denny's. Same-store sales for its flagship brand were down less than 1% -- I've seen worse. But then again, this excluded the closures. In other words, the company's best remaining locations failed to gain incremental sales.Continue reading
Shares of restaurant company Denny's (NASDAQ: DENN) crashed on Wednesday after reporting financial results for the fourth quarter of 2024 and providing a business update -- an update that greatly troubled investors. As of 3:15 p.m. ET, Denny's stock was down 22% and was within a few percentage points of hitting its lowest price in over a decade.
The big-picture problem is that many Denny's locations aren't performing well, leading to closures. The company closed 88 underperforming restaurants in 2024. These averaged annual sales volume of under $1.1 million, which is quite low for a restaurant company and makes it hard for franchisees to profit. But there are unfortunately many other poor performers in the system. That's motivating management to close another 70 to 90 restaurants in 2025, which is more than expected.
Turning to the financial results, the numbers in isolation didn't necessarily look dire for Denny's. Same-store sales for its flagship brand were down less than 1% -- I've seen worse. But then again, this excluded the closures. In other words, the company's best remaining locations failed to gain incremental sales.
