IHOP Corp.

Through its International House of Pancakes chain, IHOP Corp. has been dishing out steadily increasing earnings to investors.

But despite double-digit earnings growth, the Glendale-based company's stock has tumbled from a 52-week high of $26 a share last June to a 52-week low of $14.94 in December. Last week, it was trading slightly below $17 per share on the New York Stock Exchange.

With a meager price-to-earnings ratio of 11.6, company officials recently announced a buyback plan for up to 1 million shares.

IHOP had not yet released its fourth-quarter earnings as of last week, but its most recent quarterly performance is a stark contrast to its lagging stock. For the third quarter ended Sept. 30, net income was $8.6 million (42 cents per diluted share), compared with $7.3 million (36 cents) for the like period a year earlier. Revenue was $72 million vs. $66.3 million.

Analysts attributed IHOP's lackluster stock to a general lack of appetite for the restaurant sector on Wall Street. "All restaurant stocks are suffering, and there's no good reason," said Michael D. Smith, an analyst with Fahnestock & Co. "IHOP plods along and does a pretty good job. There's nothing fancy about it. They've been around for 40 years and do a pretty good job of protecting their brand."

But while IHOP's overall revenues and earnings have continued to grow, its monthly same-store sales are sporadic and that is worrisome, according to Brandy Shin, an analyst with Goldman, Sachs & Co. "This is the first year where you have seen several months of negative same-store sales trends for IHOP," Shin said. "Before, they had a history of positive sales gains."

In December 1999, IHOP's same-store sales declined 1 percent, compared with December 1998. They had increased 1.1 percent in November, after declining 1.3 percent in October.

"There could be a shift in consumer spending patterns," Shin said, noting that customers seem to be moving away from the mid-scale family dining experience of an IHOP to the full-service casual dining experience of an Olive Garden, where the price points are $1 or $2 more per entr & #233;e and alcohol is served.

To attract more customers to its 903 restaurants in 37 states, IHOP last year rolled out a new "after-breakfast" menu introducing the likes of chicken penne pasta, chicken fajita salad, and a sourdough bacon burger melt.

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