Applebee’s and IHOP run promotions amid ‘tough times’ for consumers: Dine Brands CEO

Brian Sozzi

The economy is going through enough challenges, Dine Brands (DIN) CEO John Peyton says, and consumers could use a break.

And that's why Dine Brands is offering a promotion at Applebee's for 12 shrimp for $1 with the purchase of a steak.

IHOP, also owned by Dine Brands, has been running promotions of its own to lure in cash-strapped diners, including a 2x2x2 deal that offered diners two eggs, two meat portions, and two pancakes for $5.

“That’s the kind of value-add promotion that our guests need right now,” Peyton said on Yahoo Finance Live (video above). “It’s tough times.”

New York City, USA - August 18, 2022: An Applebee's Restaurant near Times Square in New York City, USA. Applebee's Restaurants LLC. is an American company.
An Applebee's Restaurant near Times Square in New York City, USA, on August 18, 2022. (JHVEPhoto via Getty Images)

Given the elevated cost of living due to inflation, Peyton expects both brands to remain promotional through the year-end, especially since the efforts to drive restaurant traffic appear to be paying off.

Dine Brands said Wednesday that Applebee's and IHOP same-store sales rose 3.8% and 1.9%, respectively, in the third quarter while adjusted operating profits rose slightly year-over-year.

Here is how Dine Brands performed compared to Wall Street estimates for the third quarter:

  • Net Sales: $232.2 million vs. $228.8 million estimated

  • Adjusted EPS: $1.66 vs. $1.30 estimated

Dine Brands stock rose slightly as of the market close on Wednesday. Shares were held back a bit, however, by Dine Brands' guidance.

The company narrowed its full-year adjusted operating profit outlook to $243 million to $248 million. Previously, Dine Brands saw adjusted operating profits in a range of $235 million to $250 million.

"The environment is tough," Peyton said, "and so we really lean into the love that people have for our brands and the promotions will continue. But I should also say that we're working on things that drive the longer term. We're very focused on our consumer and how they're feeling right now."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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