Applebee’s isn’t quite done closing restaurants on its way to becoming what it hopes will be a better performing company.
The casual dining chain’s parent company Dine Brands Global (DIN) said on Tuesday it would close as many as 80 Applebee’s restaurants this year on top of the nearly 100 it shuttered last year, while opening between 10 and 15 as it looks to improve the restaurant’s fortunes. In 2017, U.S. comparable same-restaurant sales fell 5.3% at Applebee’s, and also slipped at sister chain, the pancake-focused IHOP, where they declined 1.9% last year. The company also announced on Tuesday it was changing its corporate name from Dine Equity.
“The expected closures will be based on several criteria, including meeting our brand and image standards as well as operational results,” Dine Brands said in a statement. IHOP is also closing stores, aiming for up to 40 closings even as it plans to open as many as 100 new locations.
Applebee’s has tried to become more modern and sophisticated with moves such as installing new grills, something that cost it some of its core clientele, executives have conceded. John Cywinski, Applebee’s brand president, last year summed up the chain’s Catch-22 as follows: “While we certainly hope to extend our reach, we can’t alienate Boomers or Gen-Xers in the process.”
Still, there were signs both chains were putting their problems behind them: Dine Brands said that Applebee’s U.S. same-restaurant sales rose 1.3% in the fourth quarter, while dipping 0.4% at IHOP. And after a weak 2017, the company expects both brands to show a big improvement this year: Dine Brands forecast U.S. system-wide (including franchisees) comparable same-restaurant sales at both chains to range from unchanged to up 3%.
Wall Street cheered the news: shares of the company’s stock jumped more than 19% in late morning trading on Tuesday.