Dine Brands’ first quarter results included same-store sales declines at both Applebee’s (-4.6%) and, for the first time in 11 quarters, IHOP (-1.7%), highlighting a continuing narrative across the industry about increasing consumer sensitivity. Despite a few exceptions, that narrative has impacted concepts across segments, from McDonald’s and KFC to First Watch and Starbucks.
Weather also impacted several concepts during the early part of Q1, and Dine Brands was no exception. Notably, Dine Brands also lapped a robust Q1 2023 in which Applebee’s same-store sales increased by 6.1% and IHOP’s increased by 8.7%. Because of these latter factors, as well as sequential improvement throughout the first quarter, Dine Brands reiterated guidance for the full year, while CEO John Peyton remained optimistic about the brands’ strategies despite the Q1 slowdown.
At Applebee’s, for example, 28% of orders were tied to a limited-time promotion, up from 19% during the previous quarter. That said, Dine Brands executives are encouraged by the company's value-driven strategy it has put into place to mitigate consumer pressures. Applebee’s innovation pipeline is strong and spaced out to entice consumers to return, for instance. Its boneless wings promotion in March was the first time the chain extended a value promotion to off-premises channels, which drove a strong finish to the quarter, Peyton said.