Back to top

DineEquity (DIN) Announces Plan to Close 160 Applebee's and IHOP Restaurants

Read MoreHide Full Article

DineEquity Inc. (DIN - Free Report) fell 3% in morning trading on Friday after announcing that the company will close 105 to 135 Applebee’s restaurants and 20 to 25 IHOP locations.

The company has not said which locations will be closing. DineEquaity said in its first quarter report that only 40 to 60 Applebee’s and about 18 IHOP locations would close in 2017.

“We are investing in the empowerment of our brands by improving overall franchise financial health, closing underperforming restaurants and enhancing the supply chain,” interim CEO Richard Dahl said.

“Restaurant closures are a normal course of business in the industry and when you have a footprint as large as ours,” said Amy Mason, senior vice president for global communications and consumer insights.

This announcement follows DineEquity’s second-quarter fiscal 2017 earnings report. While the company reported earnings of $1.30 per share, beating our consensus estimate of $1.20 by 8.3%, earnings decreased 18.2% year-over-year.

Total revenue also declined 3.2% year-over-year to $155.2 million. This figure missed our consensus estimate of $156.4 million.

Casual-dining restaurants have been struggling recently as consumers move towards quick-service restaurants like Panera Bread or Chipotle Mexican Grill (CMG - Free Report) .  Buffalo Wild Wings (BWLD - Free Report) , another casual-dining chain, has chosen to test small-format locations to create a to-go dining experience in order to handle the competition.

“Closing these well-below average restaurants can have a positive brand benefit since guests are no longer experiencing a substandard experience,” Mason said. The company reaffirmed plans to open 20 to 30 new Applebee’s, mainly abroad, as well as 80 to 95 IHOP restaurants this year.

DIN remains a Zacks Rank #2 (Buy), with a Value score of ‘A.’

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think. See This Ticker Free >>



Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Chipotle Mexican Grill, Inc. (CMG) - free report >>

Buffalo Wild Wings, Inc. (BWLD) - free report >>

DineEquity, Inc (DIN) - free report >>


More from Zacks Stocks in the News

You May Like