Applebee’s and IHOP parent company Dine Brands reported financial results from the third quarter on Wednesday morning, including a same-store sales increase of 3.1% at Applebee’s, marking the casual-dining chain’s second consecutive positive quarter after being in the red since early 2023.
Average weekly sales at the chain during the quarter were $52,600, including approximately $12,000 from off-premises sales, or 22.9% of total sales.
During the company’s earnings call, chief executive officer John Peyton said positive traffic was a driver for the brand as new menu items are resonating with existing and new customers. During Q3, Applebee’s launched the Chicken Parmesan Fettuccine as part of its 2 for $25 menu, and it has since become the chain’s best-selling standalone pasta dish, representing approximately 13% of transactions. The Ultimate Trio Appetizer Sampler has also become one of its best-selling appetizers, averaging 13.5% of transactions and “contributing meaningfully to check growth,” Peyton said.
Notably, the Ultimate Trio is available for off-premises customers and has contributed to a 9% increase in those sales year-over-year.
“Guests should expect to see this continued menu innovation driven by a robust menu pipeline with a new appetizer and a new entrée added to our menu each quarter,” he added.
Applebee’s also continues to sharpen its social media focus to deepen engagement and reach a broader audience. Peyton said the chain has experienced a 266% increase in social media engagement since the same period last year.
The chain also continues to progress on its “Lookin’ Good” remodeling plan, with approximately 80 restaurants updated to date and more than 100 expected to be completed by the end of the year. Franchisees, Peyton said, are reporting strong post-remodel sales lifts and an increase in guest frequency.
“There’s more to do and plenty of opportunity ahead, and we’re committed to strengthening the brand’s relevance, sharpening our competitive edge, and driving long-term growth,” he said.
IHOP
Meanwhile, sister brand IHOP’s same-store sales were -1.5%, but traffic turned positive during the quarter. The family-dining brand gained “encouraging momentum” from its House Faves launch, now available seven days a week. This is the first time IHOP has introduced an everyday value menu as part of its core offering and momentum driven by the promotion has accelerated into Q4.
“This is (IHOP’s) first quarter of positive traffic in many years. This is a big win, especially in a category where traffic has been challenged for years,” Peyton said. “The IHOP value menu is one of the largest launches in the brand’s history, made possible through a strong partnership with our franchisees.”
He added that IHOP is also focused on increasing check and margin and has updated its barbell strategy to achieve these goals.
“We have a three-pronged approach to driving traffic. The first was launching the value platform last October. We’ve now evolved it to where we launched an everyday value menu. The third phase is balancing the value with our barbell strategy to drive check and we’re doing that in multiple ways — from upselling strategies with our tablets and servers (to) featuring some premium-priced items such as pumpkin spice (pancakes),” IHOP president Lawrence Kim said.
Since moving into “phase three,” IHOP’s value incidents have fallen from 25% of checks on weekdays to 15%.
Consumer environment
Peyton acknowledged what most other brands in the industry have pointed out during Q3 reports, and that is a softening consumer environment. For instance, guests are managing their check by trading down to lower-priced or value menu items, Peyton said.
The company has also seen a shift in guest mix in recent months, with higher-income guests coming in more often.
“We’ve had more higher-income guests joining us than lower-income guests leaving, which is the net of what’s driving our traffic growth. So, that is good news,” Peyton said. “The two cohorts we’re seeing who are most price sensitive right now are the lower-income guests and Gen Z.”
They’re dining out less, he added, but all of Dine Brands’ guests are “hyper focused” on value.
“That hasn’t changed all year and that’s our plan for the future,” Peyton said. “That focus on value is what is going to be on consumers’ minds throughout the rest of the year and into next.”
Dine Brands Q3 by the numbers
Applebee’s same-store sales increased 3.1%
Off-premises sales accounted for 22.9% of the sales mix, representing per restaurant average weekly sales of approximately $12,000
IHOP’s same-store sales decreased 1.5%
Off-premises sales accounted for 20.4% of the sales mix, representing per restaurant average weekly sales of approximately $7,500
Total revenues for Q3 were $216.2 million compared to $195.0 million for Q3 2024
General and Administrative expenses for the third quarter were $50.2 million compared to $45.4 million for Q3 2024
Adjusted net income available to common stockholders was $10.5 million, or adjusted earnings per diluted share of $0.73, compared to adjusted net income available to common stockholders of $21.4 million, or adjusted earnings per diluted share of $1.44, for Q3 2024
Consolidated adjusted EBITDA for Q3 2025 was $49.0 million compared to $61.9 million for the third quarter of 2024
Development activity by Applebee’s and IHOP franchisees for Q3 included 17 new restaurant openings and 12 closures
Contact Alicia Kelso at [email protected]
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