Applebee's owner's third-quarter profit tops Street estimate
(Reuters) - DineEquity Inc (DIN.N), the owner of Applebee's and IHOP restaurant brands, on Tuesday reported third-quarter earnings that beat Wall Street expectations, helped by a gain on the sale of restaurants to franchisees.
The Glendale, California-based company also reiterated that it expects overall sales for the full year at Applebee's established U.S. restaurants to increase 0.5 to 2.5 percent.
At IHOP the company said it expects sales to "trend toward the low end of the range" of 1.5 percent lower to 1.5 percent higher.
One analyst said on the company's conference call that its wide forecast was cause for some discomfort. Investors use these same-restaurant sales as a gauge of performance.
U.S. restaurants are fighting over diners, who are spending cautiously on meals away from home amid weak economic and job growth.
In recent weeks, chains such as McDonald's Corp (MCD.N), Chipotle Mexican Grill Inc (CMG.N) and Buffalo Wild Wings Inc (BWLD.O) have posted disappointing results.
The company, which recently finished selling most of its Applebee's restaurants to independent operators, said third-quarter net income rose to $58.7 million, or $3.14 per share, from $15.5 million, or 85 cents per share, a year earlier. The latest quarter included a gain of $73.7 million from the asset sales, which was partially offset by higher income taxes and expenses, and the expected lower segment profit resulting from the restaurant sales.
Excluding items, the company earned $1.03 per share in the latest quarter. Analysts on average expected the company to earn 93 cents per share, according to Thomson Reuters I/B/E/S.
Total revenue fell 18 percent to $216.3 million, but beat analysts' expectations of $202.6 million.
Third-quarter sales at all U.S. restaurants open at least 18 months rose 2 percent at Applebee's. They fell 2 percent at IHOP, after traffic declined.
DineEquity bought the Applebee's bar-and-grill restaurant chain in a $2 billion leveraged buyout in 2007.
Shares in the company have risen more than 36 percent this year. They closed at $57.63 on the New York Stock Exchange on Friday.
(Reporting By Lisa Baertlein in Los Angeles and Arpita Mukherjee in Bangalore; Editing by Sreejiraj Eluvangal and Carol Bishopric)
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