DineEquity Inc. shares plunged 26 percent on Thursday after the casual dining chain said same-store sales increased in the third quarter at its IHOP restaurants but declined at its Applebee's Neighborhood Grill & Bar locations.
The Glendale-based restaurant operator, which will report earnings on Oct. 27, said combined same-store sales increased 0.2 percent for the quarter ending Sept. 30. The company attributed the gains to higher average guest checks, though fewer guests dined at the restaurants.
At Applebee's restaurants, third-quarter same-store sales for franchised locations and store owned locations each fell 3.1 percent. Fewer guests dined at Applebee's restaurants, but unlike at IHOP, menu-item price increases did not offset the lower traffic.
"Unfortunately, the strong headwinds in consumer spending we witnessed in the third quarter 2008 were not offset by the new value promotion we introduced," said Chief Executive Julia Stewart in a statement.
DineEquity franchises as well as owns and operates IHOP and Applebee's restaurants. The company plans to sell about 100 of company-owned Applebee's locations by the end of the year, but analysts are skeptical given the current credit crisis.
DineEquity shares closed down $3.17 to $9.25 on the New York Stock Exchange.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- DineEquity More Than Doubles Quarterly Profit
- Investors Lose Reservations on Restaurant Operator
- Eatery Chains Feast on Reported Burger King Deal
- DineEquity Lowers Debt
- DineEquity Share Price Plunges as Applebee’s Sales Expected to Continue Decline
- DineEquity Falls on Earnings Report
- Charges Weigh Down DineEquity Earnings
- Applebee’s Franchisee Swallows More Locations