The stock of DineEquity Inc. dove more than 11 percent Wednesday after the release of the company’s fourth-quarter and full-year earnings and news that its chief financial officer would resign effective March 15.
The Glendale parent company of IHOP and Applebee’s restaurants reported $24.5 million ($1.37 a share) in adjusted net income for the quarter, a decline of 17 percent over the same period last year. DineEquity generated fourth-quarter revenues of $154 million, down about 10 percent from the previous year.
Analysts on average expected earnings of $1.37 a share on revenue of $157 million, according to Thomson Financial Network.
Profits for the full year were $108.9 million ($6.01 a share), down from $116 million ($6.15 a share) in 2015 The company reported $634 million in revenues for 2016, a 7-percent decline year-over-year.
For domestic outposts, same-restaurant sales fell 2.1 percent at IHOP and 7.2 percent at Applebee’s in fourth-quarter 2016; for the full year, sales declined by 0.1 percent and 5 percent at IHOP and Applebee’s, respectively.
DineEquity forecast similar results at Applebee’s for the coming year, predicting that same-restaurant sales would fall between 4 and 8 percent in fiscal 2017. The company was more optimistic on the performance of its IHOP restaurants, where it expects to see sales gains of up to 3 percent.
The company said it will close between 40 and 60 Applebee’s restaurants in 2017, though it expects to add as many as 30 new locations globally. DineEquity anticipates launching 75 to 90 IHOP outposts this year, mainly in the U.S. Around 18 will close as part of “normal attrition,” the company said.
“While this has been a challenging period for the industry, particularly for casual dining and Applebee’s, I have confidence in our brands,” said Chairman and interim Chief Executive Richard Dahl. The company is working with a management consulting firm to strategize ways to improve sales at Applebee’s restaurants, he said.
Meanwhile, DineEquity is on the hunt to replace two top-level positions after Chief Financial Officer Thomas Emrey announced he would be leaving the company to take the same role at Van Nuys infant product manufacturer Munchkin Inc. The news comes just two weeks after the resignation of Chief Executive Julia Stewart, who officially stepped down from the post on Tuesday.
DineEquity stock (DIN) on Wednesday fell $6.92, or 11.6 percent, to close at $52.90 on the New York Stock Exchange.