You can find original article here Nrn. Subscribe to our free daily Nrn newsletters. Applebee’s and IHOP parent company Dine Brands reported financial results from the third quarter on Wednesday morning, including a same-store sales increase of 3.1% at Applebee’s, marking the casual-dining chain’s second consecutive positive quarter after being in the red since early 2023.  Average weekly sales at the chain during the quarter were $52,600, including approximately $12,000 from off-premises sales, or ...

Financial Data and Key Metrics Changes - Consolidated total revenues increased by 10.8% to $216.2 million in Q3 2025 compared to $195 million in the prior year, primarily driven by an increase in company restaurant sales, offset by a decrease in franchise revenues [17] - Adjusted EBITDA decreased to $49 million from $61.9 million in Q3 2024 [17] - Adjusted diluted EPS for Q3 2025 was $0.73, down from $1.44 in Q3 2024 [18] - Year-to-date adjusted free cash flow was $68.2 million, compared to $77.8 million in the same period last year [18] - G&A expenses increased to $50.2 million in Q3 2025 from $45.4 million in the same period last year [17] Business Line Data and Key Metrics Changes - Applebee's reported a 3.1% increase in comparable sales, while IHOP posted a negative 1.5% in comparable sales [6][22] - Applebee's average weekly franchise sales in 2025 were $52,600, with off-premise sales contributing approximately $12,000 or 22.9% of total sales [22] - IHOP's average weekly franchise sales were $36,700, with off-premise sales contributing $7,750 or 20.4% of total sales [22] - Applebee's commodity costs increased by 0.3%, while IHOP's commodity costs increased by 5.7% compared to the prior year [23] Market Data and Key Metrics Changes - IHOP outperformed Black Box Traffic metrics every month in 2025, marking Q3 as the third consecutive quarter of traffic outperformance versus industry benchmarks [11] - The value mix at IHOP remained at about 19%, while Applebee's value mix slightly increased to about 30% in Q3 [5][50] Company Strategy and Development Direction - The company is focusing on a dual-brand strategy, combining IHOP and Applebee's to drive higher sales and create operational efficiencies [25][26] - The dual-brand concept has shown promising results, with international locations delivering 1.5X sales compared to single-branded restaurants [26] - The company plans to double its total international dual-brand restaurants by the end of the year [15] Management's Comments on Operating Environment and Future Outlook - Management noted slightly higher macroeconomic anxiety leading to more intentional spending decisions among consumers [5] - The company is optimistic about the growth opportunities across key international markets despite macroeconomic headwinds [15] - Management expects to maintain full-year financial guidance, anticipating to be on the low end of the EBITDA range due to investments in company restaurants [24] Other Important Information - The company repurchased $22.5 million in stock and paid $7.8 million in dividends in Q3 2025 [21] - The board declared a reduction of the dividend from $0.51 per share to $0.19 per share to fund a larger share repurchase program [32] Q&A Session Summary Question: What is the expected impact of company-owned stores on future performance? - Management indicated that disruptions from remodels and closures would not be present next year, expecting a $9-$10 million segment profit hit from company restaurants this year [35] Question: How is IHOP addressing check growth amidst a focus on value? - Management shared a three-prong approach to drive transactions, including upselling strategies and featuring premium-priced items [38] Question: Can you elaborate on franchisee demand for dual-branded concepts? - Initial demand is characterized by conversions rather than new builds, with more interest from IHOP franchisees due to existing dinner challenges [41] Question: What is the current consumer demographic trend? - Management noted a slight shift towards higher-income guests, while lower-income guests and Gen Z are dining out less [47] Question: What is the expected number of dual-brand openings by year-end? - The company expects approximately 30 dual-branded restaurants to be open or under construction by year-end, with a total of 50 expected in 2026 [51]

Core Insights - Casual dining has experienced a significant turnaround in performance, becoming the best-performing segment in the restaurant industry as of August, after years of underperformance [3][4] - Major casual dining chains like Chili's and Applebee's have reported positive same-store sales growth, with Applebee's achieving a 4.9% increase in Q2 [2][6] - The shift in casual dining's success is attributed to value-driven strategies that have put it in direct competition with fast food and fast casual segments [2][3] Industry Performance - Casual dining has moved from being the second-worst performer in the restaurant industry to the best-performing segment, as indicated by Black Box Intelligence data [3] - The industry's success is not merely due to easy comparisons, as casual dining has shown consistent performance improvements over a two-year basis [4] Consumer Trends - Casual dining chains are focusing on affordability and smaller portion sizes to attract a diverse consumer base across different income levels [4] - Olive Garden's strategy of testing smaller menu items at reduced prices has resulted in traffic growth among consumers from all income brackets during its fiscal Q1 [4] Company Strategies - Applebee's has successfully returned to traffic growth by enhancing its value perception, primarily through its 2-for-$25 promotion [6] - The 2-for-$25 offering serves not only as a value proposition but also as a platform for menu innovation, with new entrees introduced to drive sales growth [7]