Dine Brands sees limited sales growth as it ramps up store-level investments

Applebee's has a softer Q4 so far. Photo courtesy of Applebee's

Dine Brands reported mixed results for the third quarter ended Sept. 27. While Applebee’s bounced back from last quarter’s sales declines to 0.9% same-store sales growth, and IHOP continued its trajectory of steady but modest momentum with 0.8% same-store sales growth, the company’s overall profits slipped.

Although revenues for the casual-dining company increased 15.1%, this was mostly driven by a $36.9 million increase in company-owned restaurant revenue from locations acquired and opened over the past year. Dine Brands’ expanding company-owned portfolio heavily impacted the revenue growth, but that has not translated into higher profits, with net income falling 35.7% and adjusted earnings before interest, taxes, depreciation (EBITDA) and remaining flat.

On the brand side, IHOP is the more consistent success story, with seven consecutive quarters of traffic outperformance, tied to its barbell pricing strategy. Dine Brands has been investing in Applebee’s dual menu innovation and value strategy, which has resulted in some improvement, although executives noted that Q4 has been softer so far. Guests responded in particular to the return of the Dollarita and the introduction of the bacon cheeseburger wonton taco on the two for $25 platform.

“We dialed up menu innovation at both brands, sharpened our operational focus within the restaurants, and rolled out a new marketing strategy to better integrate our brands into the cultural conversation,” Dine Brands CEO John Peyton said during Wednesday’s earnings call.

Moving forward, the company is going all-in on store-level investments, which includes dual-brand conversions and store remodels, particularly Applebee’s. The company has thus far completed 107 Applebee’s “Lookin’ Good” remodels and expects half of the portfolio to be completed by the end of 2027. Overall, Peyton said, these store facelifts increase sales by mid-single digits.

“As we look ahead, we're prioritizing investments that improve both comp sales and the overall footprint of our brand … both to drive more value out of each location and accelerating that work through our company-owned portfolio as well,” he said.

These store remodels have increased upfront costs for Dine Brands, but Peyton said they will yield long-term results for the company.

Looking ahead, Dine Brands expects a more challenged Q4 for Applebee’s, while IHOP continues to maintain momentum. Overall, the company is tracking toward the lower end of full-year guidance.

“We've managed through different economic cycles, and we've demonstrated our ability to evolve with our guest needs without sacrificing the core of what makes each brand so special,” Peyton said.

For the third quarter ended Sept. 27, Dine Brands’ revenues $248.9 million compared to $216.1 million for the third quarter of 2025. The company reported net income of $4.5 million or $0.37 per share for the third quarter, down from $7 million or $0.48 per share the same quarter the year prior.

Dine Brands closed one net new restaurant during the quarter, for a total of 3,275 restaurants across its global portfolio.

Contact Joanna at [email protected]