IHOP closing nearly 100 'underperforming' locations amid the pandemic
Third-quarter sales ending in September dropped 18.7%
Strategic Wealth Partners President and CEO Mark Tepper on how coronavirus restrictions impact the economy and what to look for in the markets.
Indoor dining restrictions might be making it harder for pancakes to sell like hotcakes during the pandemic.
IHOP will close nearly 100 restaurants in the next six months, the pancake house and breakfast chain’s parent company, Dine Brands Global, revealed in its third-quarter earnings report Wednesday.
IHOP could close nearly 100 restaurants in the next six months. (iStock)
“We’re confident we will eventually replace these severely underperforming restaurants with better-performing restaurants,” IHOP president Jay Johns said Wednesday on a call with investors.
Third-quarter sales ending in September dropped 18.7% to $176.6 million from $217.4 million last year, Dine Brands Global said. As of September 30, out of 1,683 domestic IHOP restaurants,1,425 were open for in-restaurant dining,
The Glendale, Calif-based company, known for its breakfast feasts of pancakes, omelets and stuffed French toast, has sought to ramp up its take-out and delivery business due to closures and capacity restrictions in dining rooms as a result of COVID-19 restrictions. IHOP’s online-ordering sales accounted for 22% of total sales for the third quarter of 2020, down from 34.7% of total sales for the second quarter.
IHOP CELEBRATES 61ST BIRTHDAY BY OFFERING 58-CENT PANCAKES NATIONWIDE
A spokesperson for IHOP on Thursday said the chain's take-out business is continuing to see improvement while brick-and-mortar closures are a result of "a restaurant being in a lapsed trade area — where once vibrant traffic characteristics are no longer present — or as a result of leases expiring.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DIN | DINE BRANDS GLOBAL INC. | 34.88 | +1.18 | +3.49% |
CLICK HERE TO READ MORE ON FOX BUSINESS
“We are confident that we will eventually replace these severely underperforming locations with better performing restaurants that have volumes closer to pre-COVID levels,” a spokesperson for Dine Brands Global said in a statement to FOX Business.
“These closures will allow us to remain focused on continuing to close the gap on sales, as well as focus on key priorities including expanding off-premise, ensuring restaurant safety and providing compelling value and innovation," the spokesperson said.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Dine Brands Global, which also owns Applebee’s, further anticipates around 15 of the chain’s restaurants in the U.S. will close in the fourth quarter as a result of downsizing.