GLENDALE, CALIF. – DineEquity, Inc. will close more Applebee’s Neighborhood Grill & Bar and IHOP restaurants than previously planned, the Glendale-based company said Aug. 10 when giving second-quarter financial results. A range of 105 to 135 Applebee’s restaurants will close, up from a previous range of 40 to 60. A range of 20 to 25 IHOP restaurants will close, up from 18 planned closures previously announced. As of June 30, 1,984 Applebee’s restaurants and 1,740 IHOP restaurants operated globally. DineEquity reported net income of $21,280,000, or $1.18 per share on the common stock, in the quarter ended June 30, which was down 26% from $28,829,000, or $1.46 per share, in the previous year’s second quarter. Second-quarter total revenues slipped 3.2% to $155,199,000 from $160,258,000.
“We are investing in the empowerment of our brands by improving overall franchisee financial health, closing underperforming restaurants and enhancing the supply chain,” said Richard J. Dahl, chairman and interim chief executive officer of DineEquity, Inc. “We are focusing on operations and elevating the guest experience, whether in our restaurants or off-premise. We believe 2017 will be a transitional year for Applebee's, and we are making the necessary investments for overall long-term brand health and expect to see improvement over the next year.”
DineEquity also on Aug. 10 named Stephen P. Joyce as the company’s c.e.o., effective Sept. 12. Mr. Joyce was c.e.o. of Choice Hotels International, Inc. Mr. Dahl will remain as chairman.
DineEquity for the fiscal year still expects Applebee’s franchisees to develop between 20 and 30 new restaurants globally, with the majority opening in international markets. DineEquity expects IHOP franchisees and its area licensee to develop between 80 and 95 restaurants globally, with the majority opening domestically.
Domestic, system-wide, comparable same-restaurant sales in the second quarter declined 2.6% for IHOP and 6.2% for Applebee’s. DineEquity revised domestic, system-wide, same-restaurant sales performances for the fiscal year. Revised expectations for Applebee’s are a decline in a range of 6% to 8%, which compared to a decline in a range of 4% to 8% previously estimated. Revised expectations for IHOP are a decline in a range of 1% and 3%, which compared to 0% to an increase of 3% previously estimated.
DineEquity lowered fiscal-year expectations for profit in its Franchise segment to between $302 million and $314 million, which compared to a previous expectation of $323 million and $338 million.
“This downward revision is primarily due to an expected contribution in the second half of 2017 of approximately $8 million to the Applebee's national advertising fund to mitigate the decline in franchisee contributions, additional expected reserves for collectability of Applebee's royalties, the revised guidance for both IHOP's comparable same-restaurant sales and Applebee's restaurant closures discussed above,” DineEquity said.
DineEquity in six-month period ended June 30 reported net income of $35,643,000, or $1.98 per share on the common stock, which was down 32% from $52,372,000, or $2.84 per share, in the same time period of the previous year. Six-month total revenues fell 3.9% to $311,373,000 from $323,782,000.
