Shares of DineEquity (DIN) fell Tuesday after the restaurant-chain operator revealed a weaker-than-expected second-quarter profit on softer IHOP sales.
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The Glendale, Calif.-based operator of IHOP and Applebees moderately-priced restaurants posted net income of $348 million, compared with $14 million in the same quarter last year.
Excluding one-time items, the company earned $1 a share, below average analyst estimates polled by Thomson Reuters of $1.02 a share. Revenue for the three months ended June 30 was $268.34 million, down from $340.14 million a year ago, just missing the Streets view of $269.4 million.
DineEquity, which bought Applebees in a $2 billion leveraged buyout in 2007, has been working to improve sales at the community-run bar and grill. The 3.1% increase in comparable store sales show its hard at the neighborhood grill has been paying off.
Our second quarter results demonstrate another impressive performance by the team at Applebee's, where we have now seen a full year of positive same-restaurant sales growth, evidence that our brand revitalization strategies are working and that guests are enthusiastically reengaging with Applebees, said the companys chief executive Julia Stewart.
The stronger sales at Applebees helped to offset a 2.8% decline at IHOP. Stewart said while the company is disappointed with the IHOP results, it has identified the issues that need to be addressed, and will stand by its fiscal outlook.