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Friday, May 20, 2022

Dine Brands Lookin’ Good in the Neighborhood

The announcement of higher revenue for the fourth quarter and full year sent shares of Dine Brands Global Inc., parent company of Applebee’s Neighborhood Grill + Bar and IHOP restaurants, up more than 12 percent on Feb. 21. For the quarter ended Dec. 31, the Glendale company reported revenue rose 21 percent to $214 million. For the full year, revenues grew 6.7 percent to $781 million. In terms of its chains, Applebee’s had a same-store sales increase of 3.5 percent compared to the same quarter a year ago, while IHOP revenue grew 3 percent. Analysts took the report as a good omen for future performance. “We continue to expect continued same store sales growth momentum at both Applebee’s and IHOP to drive margin upside and improvement in net unit growth, resulting in upward revision in expectations and valuation expansion,” Wedbush analyst Nick Setyan wrote in a note to investors on Feb. 22. Maxim Group analyst Stephen Anderson wrote that “at Applebee’s, we expect first quarter 2019 same-restaurant sales to build on the 3.5 percent comparable recorded in the fourth quarter of 2018 based on strong food and beverage promotions.” At IHOP, Anderson credited “ongoing strength in IHOP’s new burger menu platform” as a sales driver. Last summer, IHOP temporarily changed its name to IHOB to promote its burgers, a marketing strategy that seems to have worked. Analyst Brian Vaccaro at Raymond James noted another marketing victory for Dine Brands, namely, IHOP’s holiday addition of menu items to tie in with the movie “The Grinch” from Warner Bros. Pictures in Burbank. Vaccaro also focused on delivery as a growing revenue stream at both chains. At IHOP, delivery grew 23 percent during the quarter compared to a year earlier and now accounts for about 8 percent of sales. For Applebee’s, deliveries increased 40 percent and represent about 11 percent of total sales, he wrote to investors on Feb. 22. Since arriving at the company in September 2017, Chief Executive Stephen Joyce has made several key marketing decisions, including returning to Applebee’s former tagline “Eatin’ Good in the Neighborhood.” “Both Applebee’s and IHOP have outperformed their respective categories by delivering on comprehensive efforts to drive their businesses and delight guests,” Joyce said in a statement that accompanied the quarterly results. “As we head into 2019, we are very encouraged by our outlook and growth opportunities. We have the right strategies in place to drive long-term momentum and create additional value for our shareholders.” After announcing results on Feb. 21, shares gained $10.98, or 12.4 percent, to close at $99.49. Shares closed Feb. 27 at $97.28.

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.

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