DineEquity Inc. said on Monday its third quarter loss increased due to lower same-store sales at its Applebee’s locations and greater interest expenses. But shares closed up 54 percent after the company announced it reduced debt and arranged the sale of 110 Applebee’s restaurants to franchisees.

The Glendale-based owner of the IHOP and Applebee’s chains reported a net loss of $16.4 million (-98 cents per share), compared with loss of $11.6 million (-69 cents) a year ago.

The company had a $50.5 million hike in interest expenses related to its Applebee’s acquisition, plus an impairment charge of $28.3 million related to the sale of Applebee’s company-owned restaurants in Texas, Nevada and New Mexico.

The company’s long announced intention to reduce expenses by selling off a number of the locations was considered a particular challenge in the current credit crisis. DineEquity said it sold 29 Applebee’s restaurants to franchisees so far, and has agreements to sell 81 more.

Revenue soared 328 percent to $391 million, in large part due to the acquisition of Applebee’s. But lower consumer spending caused Applebee’s same-store sales to drop 3.1 percent, while IHOP same-store sales rose 0.2 percent.

“Our refranchising and brand revitalization strategies have worked at IHOP, and we believe the similar approach we are employing at Applebee’s will yield positive results over the long-term,” said Chief Executive Julia Stewart in a statement.

Excluding charges, the company’s loss was 47 cents per share. Analysts polled by Thomson Reuters on average expected a 9 cent loss on revenue of $404 million.

DineEquity shares closed up $3.16 to $9.06 on the New York Stock Exchange.