Denny's says its cash-strapped adult customers have apparently resorted to ordering from the kids menu to save money.
The company made the disclosure during an earnings on Tuesday.
Denny's also announced it is streamlining its menu, cutting down options from 97 to 46.
While Denny's faced some financial hurdles, Denny's CEO Kelli Valade said that their same-restaurant sales outperformed industry averages for the third consecutive quarter of 2024.
The company attributed that to the relaunch of its $2-$4-$6-$8 value menu that's appealing to the chain's lower-income customers.
Steve Dunn, Denny's executive vice president, also announced the company is closing 150 underperforming restaurants. 50 of them will close by the end of the year and the rest will close in the next year., leaving the 71-year-old company with 1,375 restaurants by 2025.
The company has not yet announced which locations are on the chopping block.
Dunn said that Denny's customers are still coming in but trimming their bill by ordering off the kid's menu, Fast Company reported.
In addition to the closures, Denny's is also changing its requirement that locations remain open 24 hours a day.
The food chain has found that about 25 percent of its locations haven't returned to these hours since the pandemic began.
The company says some locations closing overnight will save money.
Denny's Corporation shares dropped by 17 percent on Tuesday but rebounded slightly by Wednesday afternoon.
