Shares of IHOP parent jump after earnings beat, underperforming restaurants under review

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Dine Brands Global Inc. stock rose 6.2% in Wednesday premarket trading after the IHOP and Applebee’s parent reported third-quarter earnings that beat expectations and announced a review of IHOP restaurants. Net income totaled $9.69 million, or 60 cents per share, down from $23.1 million, or $1.36 per share last year. Adjusted EPS of 80 cents was down from $1.55 last year but ahead of the FactSet consensus for 37 cents. Revenue of $176.6 million was down from $217.4 million last year but also ahead of the FactSet consensus for $166.0 million. Domestic comparable sales at IHOP sank 30.2% while Applebee’s domestic comparable sales were down 13.3%. As of Sept. 30, 97% of Dine Brands restaurants were open for either off-premise or dine-in service. “As state and local governments began to ease restrictions on dining room service, our off-premise business at each brand still drove robust sales,” said Steve Joyce, chief executive officer of Dine Brands, in a statement. As of Sept. 30, Dine Brands had $389.6 million of total cash, including restricted cash of $80.3 million. The company is reviewing underperforming IHOP locations with 100 locations possible over the next six months. The company is expected to close 15 Applebee’s locations in the the fourth quarter. Dine Brands stock has fallen 32.4% for the year to date while the S&P 500 index has gained 5% for the period.
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