Takeout is taking over Applebee’s and IHOP owner Dine Brands Global (DIN).
The company is seeing strong takeout orders at both Applebee’s and IHOP, Dine Brands CEO Steve Joyce told Yahoo Finance. Joyce has aggressive plans to make the carryout order option available at more Applebee’s locations. Meanwhile, IHOP is finding early success with delivery via a new DoorDash partnership.
For all of 2018, Applebee’s and IHOP’s “off-premise” same-store sales surged by 32% and 30%, respectively. Off-premise sales represent sales of food to be eaten outside of the restaurant. The overall off-premise business now constitutes 11% of Dine Brand’s overall business. That’s impressive considering Applebee’s and IHOP are traditional sit-down restaurants.
The takeout business is icing on the cake in what amounts to an eye-opening comeback for Dine Brands this past year under Joyce’s leadership.
Applebee’s same-store sales rose 3.5% in the fourth quarter, the fifth straight increase, powered by new alcoholic drink promotions and value-centric TV marketing.
IHOP’s same-store sales rose 3% in the fourth quarter, notching its fourth consecutive increase. IHOP has continued to piggyback off a successful burger promotion over the summer, more recently promoting an all-you can eat pancake offer.
An acquisition is likely
Dine Brands shares have surged 47% year-to-date. The stock has further been supported by Joyce — who is the former long-time CEO of Choice Hotels — weeding out underperforming restaurants and running a more disciplined organization relative to prior management.
Joyce reiterated to Yahoo Finance that he remains very interested in acquiring another restaurant chain that could be rolled out nationally. His ideal target would be private, founder led, with $100 million or less in annual sales and operate about 70 to 80 restaurants currently.
“I would be surprised if we don’t do an acquisition this year,” Joyce said.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi