DineEquity Inc.’s earnings for the first quarter of 2011 more than doubled compared to the same period last year, with its Applebee’s Neighborhood Grill & Bar chain showing strong sales performance and its IHOP chain performing less favorably.
For the quarter that ended March 31, the Glendale-based company’s net income was $28.1 million, or $1.53 per diluted share, on sales of $300.2 million. For the same period last year, the company had net income of $12.8 million, or $0.75 per diluted share, on revenues of $258.1 million.
The increase in net income was partially due to a gain on the sale of 65 Applebee’s company-operated restaurants during the quarter, the elimination of the dividend on Series A perpetual preferred stock and lower non-cash interest. These items were partially offset by expenses related to re-pricing of the company’s credit facility in February, lower segment profit as a result of refranchising a total of 148 restaurants and impairment charges related to the termination of the sublease of the space currently used as Applebee’s headquarters.
The shift of the Easter holiday to the second quarter of 2011, from being in the first quarter in 2010, positively affected Applebee’s sales while it negatively affected IHOP’s sales, DineEquity said. Without the shift, Applebee’s was expected to have an increase in sales of 3.3 percent, while IHOP was expected to have a decrease of 2.7 percent.
“We are very pleased with the progress made in the first quarter toward several strategic goals, including revitalizing the Applebee’s brand and reducing our debt,” said Julie A. Stewart, chairman and CEO of DineEquity. “In the quarter, we lowered total outstanding debt by nearly nine percent and are making significant progress in reducing our leverage.”
She added that turnaround initiatives at Applebee’s have produced nine consecutive months of positive same-restaurant sales.