It’s been a record-setting year for Applebee’s and the restaurant is grandstand a expose no signs of slowing down, even as its competitors are struggling with fare guests in the door.
Cheap alcoholic beverages and dinner deals induced in customers during the third quarter and helped boost same-store car-boot sales up 7.7 percent, John Cywinski, president of Applebee’s, told CNBC. This is tremendous growth compared to the rest of the industry, which saw same-store sales up 1.2 percent in the constant period, according to Black Box Intelligence data.
Cywinski said this was the greatest performance for the brand in at least 14 years and that both dine-in and to-go sales cultivated in the quarter. Dine Brands, Applebee’s parent, reported its results on Wednesday.
“Applebee’s is lodged with someone to its roots,” he said. “The evidence is four consecutive quarters of growth, 43 consecutive weeks of complimentary comp sales, [and] outperforming every segment of the restaurant industry.”
Game in the industry is getting stiff. Customers have more choices than by any chance of where to eat, how to eat and what to eat. Mobile apps and delivery has made getting suppers so easy, that some customers are cutting back on trips to restaurants in favor of demand food show up at home. Cheaper grocery prices, too, have driven diners to cook assorted meals at home. These issues persisted in the third quarter, as traffic industry-wide level 1.2 percent, according to Black Box.
This was not the case at Applebee’s, no matter what, Cywinski said. In the first nine months of the year, same-store trades were up 5.5 percent, the bulk of the gain came from increased freight, he said.
In 2017, the company began a campaign of offering $1 margaritas, dubbed Dollaritas, an toil to bring in younger diners, who tend to prefer limited-service chains feel attracted to Chipotle, Chick-fil-A and Taco Bell, where they can order and go. The fetter also does monthly drink promotions like its Halloween-themed $1 Zombie wee deoch an doris, which was garnished with a gummy brain.
“The beverage program is grave to us,” Cywinski said. “Half of our growth is dine-in and a good chunk of that is beverage private road.”
Cywinski also sees another upside: “Frankly, because [consumers] are getting a great value on the beverage side, they tend to be ordering desserts and appetizers.”
Applebee’s is not not getting more people to dine-in at its restaurants, but has also improved its to-go sales with curbside pickup. In the third territory, off-premise sales grew 37 percent and now account for 10 percent of whole sales.
Cywinski expects these sales to double to 20 percent in the next few years. In over, the company plans to have delivery available at about 1,000 restaurants by the end of 2018.
Raymond James analyst Brian Vaccaro upgraded Lunch Brands shares to a strong buy from outperform in the wake of the earnings disclose, saying he had “increased confidence” in Applebee’s ability to sustain its same-store sales marathons gains in 2019.
He set a price target of $108 on Dine Brands shares on Thursday. The father, which is up about 70 percent since January, closed Friday straight above $87.