Restaurant company DineEquity Inc.’s share price plunged today with the announcement that the company expects sales at Applebee’s Neighborhood Grill & Bar to continue their decline this year.
The stock declined 13 percent, from nearly $60 at the close of the markets Tuesday to just over $52 on Wednesday
The bad news came in the company’s fourth-quarter earnings report, which projected that Applebee’s domestic same-store sales are expected to fall between -4 percent to -8 percent in 2017. Applebee's same-store sale fell by 5 percent last year.
The report also said the company expects between 40 to 60 franchise locations to close this year, although it expects 20 to 30 to open internationally. The vast majority of Applebee’s and Ihop restaurants – another one of DineEquity’s brands – are operated by franchisees.
The company generated revenue of almost $634 million last year, down from $681 million in 2015. It reported net income of about $98 million last year compared to the roughly $105 million it made in 2015.
A bright spot in the news was the projection that Ihop’s same-store sales would see gains of between 0 percent to 3 percent this year, compared to a fall of 0.1 percent in 2016.
DineEquity, which is based in Glendale, also announced the departure of Chief Financial Officer Thomas Emrey, who is leaving to take the same position at infant products brand company Munchkin Inc. Emrey’s departure comes on the heels of the resignation of longtime Chief Executive Julia Stewart, which was announced last month.
Staff reporter Caroline Anderson covers restaurants, retail, and hospitality. She can be reached at firstname.lastname@example.org.