new York
CNN
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Denny's is closing 150 restaurants over the next year and the 71-year-old restaurant chain is considering a major change to its 24-hour hours.

Fifty locations are scheduled to close by the end of 2024, while the remaining 100 will close in 2025, Denny's announced in a conference call Tuesday. This corresponds to a tenth of the restaurants, leaving 1,375 locations remaining upon completion. A specific list of closing restaurants was not immediately announced.

According to Steve Dunn, Denny's executive vice president and chief global development officer, Denny's is targeting “underperforming restaurants” that are weighing on the company's financial performance. The affected locations are either too old for renovation or are in areas that have become unprofitable.

The chain, best known for never closing its doors, also makes a big concession to its franchisees regarding the commitment to stay open 24 hours a day. Since the pandemic, about a quarter of restaurants have not returned to those 24-hour hours, so Denny's is relaxing requirements for franchises to do so.

Denny's joins a broader trend of restaurants shortening their hours since the pandemic. Major changes in customer behavior, including earlier meal times and less late-night alcohol consumption, have prevented a return to pre-pandemic patterns. Higher labor and food costs have also forced restaurants to close earlier.

For Denny's, Dunn admitted that the 24-hour operation is a “shortening that has happened to everyone” and that less foot traffic during off-hours means it “doesn't make sense” for a restaurant to stay open.

Other changes at Denny's include a slimmed down menu, with the number of options reduced from 97 to 46. The chain also noticed that cash-strapped adults were increasingly ordering from the children's menu to save money.

Shares of Denny's (DENN) fell 17% on Tuesday after earnings fell short of analysts' expectations. The stock is down 50% for the year.