Applebee's, Bravo Brio Sales Drop Amid U.S. Casual-Dining Slumpby
DineEquity shares fall after Applebee's sales trail estimates
Deals in fast food, fast casual are hurting sit-down chains
Faster food is taking a bite out of sit-down restaurants.
Applebee’s, owned by DineEquity Inc., is the latest victim in the U.S. casual-dining slump. Its domestic same-store sales fell 3.7 percent in the latest quarter, the Glendale, California-based company said in a statement on Thursday. That trailed analysts’ estimate for a drop of 2.1 percent, according to Consensus Metrix.
DineEquity shares dropped as much as 5.1 percent to $81.24 on Thursday in New York, the biggest intraday decline since Feb. 26. Through Wednesday’s close, the stock had gained 1.1 percent this year.
Fast-food and fast-casual rivals have been winning market share from casual-dining chains, which typically have slower service and are more expensive. McDonald’s Corp. has recently been successful attracting diners with its all-day breakfast and steep discounts, such as a two-for-$5 menu. More contemporary fast-casual chains also are hurting sales at sit-down restaurants.
Bravo Brio Restaurant Group Inc., which is promoting its carryout business and introducing online ordering, on Monday reported a 2.8 percent decline in same-store sales during the first quarter. The day after the results were reported, shares of the company dropped 9.9 percent, marking the largest decline in almost six months. Bravo Brio owns the Italian-food brands Bravo! Cucina Italiana and Brio Tuscan Grille.
Growth has recently slowed for U.S. sit-down chains, according to researcher IBISWorld Inc. Sales are expected to rise just 1.7 percent this year, after gaining 2.9 percent in 2015 and 5.1 percent the year before. Americans are increasingly looking for convenience and lower-cost meals, which has hurt the industry, IBISWorld says in its latest report.
Buffalo Wild Wings Inc. also reported a slowdown last week. Comparable-store sales dropped 1.7 percent in the most recent quarter at company-owned Buffalo Wild Wings locations. The chain is working to attract budget-conscious Americans with cheaper lunch options and takeout, as well as happy hour deals and Tuesday night wing specials.
“There is a price-sensitive consumer out there right now,” Buffalo Wild Wings Chief Operating Officer James Schmidt said on a conference call.