Applebee’s, IHOP Report Beginning of Growth Under New Strategy
DineEquity Inc., the parent company of Applebee’s and IHOP, reported signs of encouraging positive sales and traffic performance in a Feb. 20 earnings call recapping the fourth quarter of 2017. DineEquity also announced the rebranding of its company name to Dine Brands Global Inc. as part of the new strategy aimed at stabilization and growth.
“We are a company in transition,” said Steve Joyce, CEO of Dine Brands. “The new name reflects a shift in our culture and our way of thinking, and a new strategy. We are currently implementing several initiatives to transition to a growth company for our shareholders.”
Dine Brands, and Applebee’s in particular, has suffered from shifting consumer expectations in the way of declining sales and shuttering franchises. Applebees reported in August that it expected to close 135 restaurants in 2017. But under a revised strategy, executives say the trajectory is changing course.
Applebee's domestic system-wide comparable same-restaurant sales increased 1.3 percent for the fourth quarter of 2017, Dine Brands reported. At IHOP, domestic system-wide comparable same-restaurant sales declined 0.4 percent for the fourth quarter of 2017. For the entire year, Applebee’s domestic system-wide comparable same-restaurant sales declined 5.3 percent, while IHOP’s declined 1.9 percent.
But Joyce said the new strategy has already brought sales up by 5 percent at Applebee’s and 2 percent at IHOP in January. The new strategy directs resources from corporate directly to Dine’s brands, invests in brand leadership, and accelerates sustainable growth.
“While we have more work to do, I am very confident in the steps we are taking,” Joyce said.
Know Thy Customer
Underpinning the turnaround strategy at Applebee’s is what brand president John Cywinski called embracing Applebee’s “core DNA” as a familiar, welcoming and all-American brand that doesn’t pretend to be overly hip or trendy.
“We know who we’re targeting and what drives purchase behavior at Applebee’s,” Cywinski said. “Our guest profile is wonderfully diverse from an age perspective … which we view as a real strength. We target routine traditionalists and value seekers. Without getting into detail, these folks represent our sweet spot and we’re well positioned to drive frequency here moving forward.”
Applebee’s named Cywinski brand president in March of 2017. Dine Group’s CEO Joyce joined the team in September 2017 from Choice Hotels. Applebee’s announced another new team member, Joel Yashinsky, in January. Yashinsky comes from McDonalds to helm Applebee’s marketing.
IHOP’N Go Lifts Off
Meanwhile, at sister brand IHOP, offering guests easy ways to enjoy the brand off-premises is seeing early signs of success. Brand president Darren Rebelez said the new carry-out program, which launched in November 2017, is driving up overall to-go comp sales by 23 percent.
“Convenient carry-out in our restaurants is more important now than ever,” Rebelez said during the earnings call. “We’ve seem extremely positive results from our IHOP’N Go platform.”
IHOP is also in the process of completing a national roll-out of a fully integrated online ordering system through IHOP.com.
“We’re very excited about the steps we’ve created to extend the reach of our brand,” Rebelez said.