Quite A Hop For IHOP
Dineequity, the owner of iHop and Applebee’s, has soared a whopping 133% since the beginning of the year. What’s going on?
Based in Glendale, Calif., DineEquity and its franchisees own or operate almost 3,400 restaurants under the Applebee's Neighborhood Grill & Bar and IHOP brands.
When the firm reported quarterly earnings at the end of April, they revealed profits almost tripled with the results largely due to cost controls and higher sales at its IHOP locations.
Sounds impressive. We were so intrigued we invited CEO Julia Stewart to join us on Fast Money.
She explained that the strength comes from the power of Dineequity’s brands. “People love their IHOP and Applebee’s,” she says. “And people want to eat out,” regardless of the economy. They choose Dineequity restaurants because they’re not terribly expensive -- prices are affordable.
Despite the strategy none of the Fast Money traders could be convinced to recommend the stock as a buy.
And J.P. Morgan restaurant analyst Steven Rees said in a client note that he remained cautious on the company's long-term outlook.
Want to know more? Check out our entire interview with Julia Stewart. Watch the video now.
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Trader disclosure: On May 13th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (F), (WFC), (HRS), (TGT), (WFC), (SKF), (SDS); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Seymour Owns (AAPL), (BAC), (BX), (EEM), (FXI), (PBR), (TSL), (TSO); Seymour Is Short (NUE); Cortes Owns The Yen; Cortes Owns (GS)
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