IHOP’s name-change publicity stunt, becoming “IHOb” to promote its new burger menu, is still showing results, as the pancake chain has doubled its comparable burger sales since before the promotion, according to its parent Dine Brands Inc.
In June, IHOP briefly changed its name to “IHOb,” or International House of Burgers, to promote the launch of its Ultimate Steakburgers.
IHOP is part of the Dine Brands DIN, +1.93% portfolio of restaurant brands, which also includes Applebee’s.
In the weeks after the launch, Dine Brands said burger sales quadrupled for a brief period. And since June, IHOP has had positive comp sales every week at dinner. On the Wednesday earnings call, IHOP President Darren Rebelez highlighted the growth of the company’s business “beyond breakfast.”
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“[W]e’re very optimistic about the potential of this platform to drive additional share gains,” he said, according to a FactSet transcript.
With billions of impressions and time spent among the top trending Twitter topics, Joyce said the campaign exceeded the company’s expectations.
“We believe that engaging our guests on a lot of different levels, making engaging things to talk about is just fun,” Joyce told MarketWatch.
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IHOP may have gotten all of the attention on social media, but sister chain Applebee’s got its fair share of attention with 7.7% same-restaurant sales growth in the most recent earnings report.
According to Kalinowski Equity Research, Applebee’s is one of only four of the top 25 largest U.S. restaurant chains to report 5% same-restaurant sales or more. The others are Domino’s Pizza Inc. DPZ, -0.28% (up 6.3%), Olive Garden (part of the Darden Restaurants Inc. DRI, +0.42% portfolio and up 5.3%), and Taco Bell (part of the Yum Brands Inc. YUM, -1.24% , up 5%).
“We’re reclaiming our position as the to-go restaurant company,” Joyce said, adding that Applebee’s was a leader in takeout until about 2010.
“Then we didn’t emphasize it as much as we should have.”
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And for those who decide to dine in the restaurant, he says Applebee’s is a place to eat and drink away the stresses of the day.
“People come to the restaurant to relax, to be themselves,” he said.
Raymond James, which upgraded Dine Brands to strong buy from outperform in a Thursday note, said its off-premise business and franchisees deserve the credit.
“Applebee’s franchisee health continues to improve as evidenced by improved royalty collections,” analysts said.
Raymond James has a $108 price target on Dine Brands stock.
According to a Moody’s report, casual dining will continue to be the most challenged segment of the restaurant industry. Not only is there competition from the quick-service brands, like McDonald’s Corp. MCD, +1.07% and Wendy’s Co. WEN, -1.05% , but also from Starbucks Corp. SBUX, +9.70% , convenience stores, and other “non-traditional food providers.”
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“The U.S. restaurant industry is also overstored relative to actual demand, with casual dining – which includes bar and grill – as the biggest offender,” Moody’s said.
Joyce says IHOP and Applebee’s attract a broad swath of diners, which helps them buck that trend.
“We are appealing across a broad spectrum of the U.S.,” he said. “It’s generational” with customers saying, “My parents took me there, my grandparents took me there, and I’m taking my kids there.”
Dine Brands shares have rallied more than 72% for the year to date while the S&P 500 index SPX, -0.63% has gained nearly 2% for the period.
