Applebee's to close more than 100 locations

Applebee's to close more than 100 locations

During its quarterly earnings report, DineEquity Inc. said 105 to 135 Applebee's restaurants could close, and 20 to 30 new restaurants are expected to open, the Los Angeles Times reported.

The announcement coincided with the company's revelation that Stephen Joyce, CEO of Choice Hotels International, has been tapped to replace Dahl as its new CEO in September.

Applebee's domestic system-wide comparable same-restaurant sales declined 6.2 percent for the second quarter.

The casual-dining restaurant industry has gone through changes in recent years, dealing with more competition from quick-service restaurants and home-delivery meal options that bill themselves as healthy and upscale. Equities research analysts expect DineEquity to earn $5.17 per share next year, which means the company should continue to be able to cover its $3.88 annual dividend with an expected future payout ratio of 75.0%. As of the latest earnings report the EPS was $4.76 and is projected to be $4.77 for the current year with 17,980,000 shares presently outstanding.

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These closures typically fall into one or two categories. First, those that are older and located where high traffic is no longer present. Teachers Advisors LLC now owns 29,290 shares of the restaurant operator's stock worth $2,255,000 after buying an additional 728 shares during the last quarter.

The company hasn't decided which restaurants it will close.

"IHOP remains on solid ground, despite soft sales this quarter", Dahl said in the statement. Same-store traffic fell by 3% during June. This represents a $3.88 annualized dividend and a dividend yield of 10.00%. But Applebee's president John Cywinski said during the call that the targeted restaurants will be the older ones in areas that aren't busy and restaurants that failed to meet expectations. The company didn't disclose the locations of the stores that would be closing. Changes such as installing fire grills in all 2,000-plus locations across the U.S. - a $40 million investment by the chain's franchisees - and redesigning locations were supposed to distinguish Applebee's from other casual dining chains.