DineEquity works to reverse slow sales
After a failed promotion dampened momentum at Applebee’s in the third quarter, parent company DineEquity Inc. said it will work harder to combine value and innovation to reverse sliding sales, company officials said Thursday in a call discussing the quarter’s earnings.
Same-store sales declined for both Applebee’s Neighborhood Grill & Bar and IHOP, while net income increased 15 percent to $16.5 million, or 85 cents per share, for the quarter ended Sept. 30, compared with $14.3 million, or 44 cents per share, for the same quarter last year.
The results reflected lower interest rates and the elimination of stock dividends.
Revenue for the quarter declined to $264.5 million, compared with $335.5 million a year ago.
“There’s no question the soft economy is creating challenges,” said Julia Stewart, Glendale, Calif.-based DineEquity chairwoman and chief executive.
Applebee’s domestic systemwide same-store sales dropped 0.3 percent for the quarter, chiefly due to lower traffic that was partially offset by an increase in the average guest check, the company said.
Same-store sales declined 0.4 percent at franchised U.S. restaurants and 0.1 percent at company-operated units during the quarter. It was Applebee’s first decline after more than a year of positive sales trends.
Stewart attributed the results in part to a promotion of “Stacked Stuffed & Topped” entrées introduced in July, which she said “failed to resonate with guests.”
The promotion was pulled early and replaced in August with the return of the chain’s popular two-for-$20 deal.