UPDATE 4-DineEquity sees improvement at Applebee's, shrs up
* Q3 EPS ex-items 55 cents; Wall Street view 30 cents
* Revenue fell 14.7 pct to $333.6 mln; misses Street view
* Cites improved sales at Applebee's in October
* Shares up 5 percent (Recasts with comments on Applebee's, previously NEW YORK)
LOS ANGELES, Oct 27 (Reuters) - DineEquity Inc (DIN.N) posted a stronger-than-expected quarterly profit and said October sales had improved at its struggling Applebee's restaurants. Shares rose 5 percent.
Quarterly revenue missed analysts' estimates, but the company said it was confident it would meet its full-year same-store sales targets as its Applebee's and IHOP chains benefit from new marketing and menu changes. DineEquity also reassured investors about its ability to pay down debt.
"We are encouraged by an improvement in Applebee's same-store sales trend so far in the month of October," DineEquity Chief Executive Julia Stewart said on a conference call.
Stewart noted that the company is not losing money on Applebee's "2 for $20" offer, which includes one shared appetizer and two entrees. Restaurant rivals such as Chili's Grill & Bar, owned by Brinker International (EAT.N), have sparked investor concern with margin-eroding promotions. [ID:nN20262443]
"There's no question we make money with the 2 for $20," CEO Stewart said of the special, which she said accounted for about 20 percent of sales.
Net income available to common shareholders was $7.9 million, or 46 cents per share, compared with a year-earlier loss of $16.4 million, or 98 cents per share.
Excluding impairment charges and other items, the company earned 55 cents a share. Analysts on average expected 30 cents, according to Thomson Reuters I/B/E/S.
Results were helped by a decline in general and administrative costs of more than 14 percent.
Revenue at Glendale, California-based DineEquity fell about 14.7 percent to $333.6 million, missing analysts' average forecast of $337.2 million.
The company also boosted its 2009 outlook for cash flow from operating activities to between $130 million and $140 million from its prior view of $115 million to $125 million.
APPLEBEE'S TURNAROUND Continued...
