New IHOP menu items boost DineEquity's profit
GLENDALE, Calif. (AP) — New menu items at pancake chain IHOP helped its parent company DineEquity Inc. post a 14 percent rise in its first-quarter net income.
The results beat Wall Street expectations, and the restaurant operator's shares jumped $5.69, or 7.5 percent, to $81.50 in afternoon trading Thursday.
Sales at IHOP restaurants rose 3.9 percent in the quarter from a year ago as diners paid more during each visit, the company said. Adding new crepes, such as its sweet cream cheese stuffed crepes, helped boost sales, said CEO Julia Stewart in a conference call with analysts. IHOP will add new burgers and sandwiches to the menu this year for its lunch crowd, she said.
Sales at the company's other chain, Applebee's, fell half a percent. DineEquity is in the midst of upgrading Applebee's locations after acquiring the chain in 2007. Stewart said about 95 percent of Applebee's restaurants will have been remodeled by the end of the year.
DineEquity said its net income rose to $20.5 million, or $1.08 per share, in the quarter ending March 31, compare with $17.9 million, or 93 cents per share, in the same quarter a year ago. Adjusted to remove one-time items, it earned $1.26 per share. Analysts expected an adjusted $1.14 per share, according to FactSet.
Revenue rose 2.5 percent to $167.2 million from $163.2 million, beating the $164.6 million analysts expected.
DineEquity, based in Glendale, California, has about 3,600 IHOP and Applebee's restaurants around the world.