The Savage-Hutter theory for granular avalanches assumes that the granular material is in either of two limiting stress states, depending on whether the motion is convergent or divergent. At transitions between convergent and divergent regions, a jump in stress occurs, which necessarily implies that there is a jump in the avalanche velocity and/or its thickness. In this paper, a regularization scheme is used, which smoothly switches from one stress state to the other, and avoids the generation of such singular surfaces. The resulting algorithm is more stable than previous numerical methods but shocks can still occur during rapid convergence in the run-out zone. Results are presented from two-dimensional calculations on complex geometry which illustrate that some necking features observed in laboratory experiments can be explained by the regularized Savage-Hutter model.