DineEquity Inc (DIN.N), the owner of Applebee's and IHOP restaurants, reported second-quarter profit on Tuesday that handily beat Wall Street estimates on better-than-expected sales at established restaurants.
Shares jumped 10.5 percent on the heels of the results, which were boosted by menu changes, new advertising, more efficient restaurant operations and the sale of restaurants to franchisees.
Net income was $16.6 million, or 87 cents per share, compared with $15.9 million, or 88 cents per share, a year earlier.
Excluding items, the company earned $1.02 per share, topping analysts' average estimate by 10 cents per share, according to Thomson Reuters I/B/E/S.
Closely watched same-restaurant sales were up 1.9 percent at IHOP and rose 1.3 percent at Applebee's. Eight analysts polled by Consensus Metrix had expected a 0.8 percent fall at IHOP and a 0.5 percent rise at Applebees.
Executives said an easier-to-navigate menu helped drive business to IHOP, while Applebees saw good results for its lunch, dinner and late-night business due to value-priced menus and more focused advertising.
Shares in DineEquity were up $6.87 to $72.25 in midday trading on the Nasdaq.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Gerald E. McCormick and Leslie Gevirtz)