DineEquity, parent of Applebee’s and IHOP, says sales in 3rd quarter trending up

Applebee’s, IHOP parent 3Q sales trending higher

GLENDALE, Calif. — DineEquity Inc. the parent company of Applebee’s and IHOP restaurants, on Wednesday said its third-quarter sales are trending higher in both chains.

For the first 11 weeks of the 12-week period, revenue at Applebee’s restaurants open at least a year increased 2.7 percent over last year, the company said.

Franchise restaurants are performing best, with same-restaurant revenue up 3.2 percent, while company operated locations increased 0.7 percent for the 11 weeks.

The improvements were attributed to ongoing marketing and menu changes, particularly the promotion of certain low-cost entrees. Company-owned restaurants also increased prices 1.2 percent, and stores were reporting higher average checks, but lower customer traffic.

For all of 2010 through Sept. 19, same-restaurant revenue in franchise stores was down 0.5 percent, while in company-owned stores it fell 2 percent.

At IHOP restaurants, revenue at locations open at least a year rose 0.3 percent in the first 11 weeks of the quarter over the same period last year. The gains reflected a promotion tied to a movie, and its Kids Eat Free promotion in August, the company said. These restaurants also had higher average checks but lower traffic.

Through Sept. 19, same-restaurant sales fell 0.4 percent from last year.

DineEquity repeated guidance for revenue in Applebee’s restaurants open at least a year to be flat to down 3 percent for its full fiscal year. It still expects to open between 25 and 30 franchise locations in fiscal 2010.

For IHOP, same-restaurant revenue is expected to range between down 1 percent and up 1 percent for the fiscal year. The chain expects to add 60 to 70 new locations through the end of the fiscal year.

DineEquity is slated to report full third-quarter results on Nov. 2.

In aftermarket electronic trading, DineEquity shares were flat with their Wednesday close at $40.58.