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DineEquity CEO: Applebee’s Q3 sales decline ‘unacceptable’

Same-store sales at Applebee’s fell 0.5 percent year over year in the third quarter, a slip called “unacceptable” by the CEO of parent company DineEquity, Julia Stewart.

This decline comes after five quarters of positive comps growth at the casual-dining chain, Stewart said on an earnings call Thursday, noting that DineEquity is working to restore consistency among Applebee’s locations and sustain positive growth.

Turnaround plans will focus on four critical areas—food, service, environment and technology—and will be aided by DineEquity’s decision to consolidate support functions for the Applebee’s and IHOP brands at DineEquity’s headquarters in Glendale, Calif., she said.

Though Applebee’s had been undergoing revamp efforts prior to Q3, they were “too subtle and incremental,” she added.

Stewart said that she will remain president of Applebee’s, a position she assumed last month after the departure of then-president Steven Layt, to see the revitalization strategy through.

The company lowered its full-year comps guidance for Applebee’s, expecting growth between 0 and 1 percent, down from the 1 percent to 3 percent range it earlier anticipated.

Comp sales at sister brand IHOP grew 5.8 percent year over year during Q3.

Net income at DineEquity rose 28 percent, to $24.3 million, on revenues of $162.4 million.
 

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