March 1 (Reuters) - Applebee's and IHOP restaurant parent DineEquity Inc beat quarterly profit estimates, helped by better sales at its Applebee's chain.
DineEquity bought Applebee's in a $2 billion leveraged buyout in 2007 and has been working to improve results at the bar-and-grill chain ever since. The second quarter marked a full year of same-restaurant sales growth at Applebee's, suggesting a successful turnaround, but then the chain's same-restaurant sales fell in the third quarter.
For the fourth quarter, same store sales at Applebee's rose 1 percent, and the company forecast strong sales at the chain for the year.
Q4 2011 Estimate* Q4 2010 Revenue $242.2 mln $242.3 mln $300 mln Net income 27.3 mln (58.1 mln) Adjusted EPS $0.91 $0.85 $0.59
- Sales at all domestic restaurants open at least 18 months fell 1 percent percent at IHOP
- The company said it expects Applebee's domestic same-restaurant sales to range between 0.5-2.5 percent in 2012
- IHOP same store sales are expected to range between a rise of 1.5 percent to a fall of 1.5 percent.
- Mild winter weather boosted U.S. restaurant sales, as more diners ventured out for food away from home.
- Prices for food and fuel have been rising, but some of that impact has been offset by lower heating bills.
- Some analysts say full-service restaurants like those run by DineEquity, Olive Garden parent Darden Restaurants Inc and Chili's Grill & Bar owner Brinker International Inc are vulnerable to rising prices at the fuel pump because their prices are higher than those of fast-food chains like McDonald's Corp, making them more of a splurge.
* Average analyst estimate according to Thomson Reuters I/B/E/S. (Reporting By Lisa Baertlein in Los Angeles and Nivedita Bhattacharjee in Chicago; Editing by Gerald E. McCormick)