The IHOP and Applebee’s parent, DineEquity blames an unstable economic environment and aggressive value promotions by competitors for their nearly 42-percent decline in first-quarter net income.
At Applebee’s domestic systemwide same-store sales declined 1.3 percent for the quarter, reflecting a drop in traffic that was partially offset by a higher average check. IHOP’s domestic system-wide sales also decreased 0.5 percent for the same reasons.
Reported by NRN.com, the decline was partly based on the company’s shift to an almost all-franchised operation. During the first quarter, DineEquity owned significantly fewer Applebee’s restaurants, most of which have been re-franchised. And one franchisee filed for bankruptcy protection last month (reported by us here).
Said Julia Stewart, DineEquity’s chair and chief executive, “The industry was clearly faced with macroeconomic headwinds which contributed to viability and variability during the quarter”.