Things Aren’t Looking Good for Applebee’s Restaurants Across America

According to the numbers, fewer and fewer people are spending their hard-earned money on going out to eat. Even fast-food establishments have taken a hit and had to increase prices just to stay up.

Applebee's recently had their Q2 earnings call, and it had some positivity, but was riddled with negativity on their position in the restaurant market.

John Peyton, CEO of Dine Brands, which owns Applebee's said,  "We began the second quarter with a strong strategy to address economic challenges. That momentum, however, slowed to a crawl through the second quarter to the extent that the trend reversed."

Applebee’s same-store sales declined 1.8% and their off-premises sales (AKA: takeout and delivery) accounted for 21.4% compared to 22.6% in Q2 2023.

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Dine Brands also owns IHOP, and between IHOP and Applebee's, there were 25 restaurant closures in Q2 of 2024 alone.

Peyton continued, "There was a change and softness in the last three months that was somewhat unexpected for us."

One of Applebee's plans to move forward and get out of the slump is to sharpen the focus on takeout and delivery. Peyton said that the economics of off-premises business are favorable for operators since third-party costs are largely passed onto the consumers.

Even The Incredible Hulk takes his shirt off to flex from time-to-time though, Dine Brands CFO Vance Changand took this opportunity to remind people what is exactly hurting Applebee's.

"The most meaningful factors that have impacted our performance are external, like household incomes and pricing, there isn’t one single casual dining brand that’s impacting our results."

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Applebee's has some big promotions on the horizon for the remainder of 2024. They have a new partnership with the NFL, and they remain optimistic that the company will navigate the "choppy waters" expected throughout the remainder of the year.

Only time will tell if the revenue decrease will decrease further or increase back up to normal, or possibly beyond.