Applebee's, IHOP CEO Julia Stewart Resigns Amid Lower Earnings Report

GLENDALE, CA -- DineEquity Inc., the parent company of Applebee's Neighborhood Grill & Bar and IHOP restaurants, reported lower earnings Friday and announced that Chairman and CEO Julia Stewart will resign effective March 1.

Once a CEO search has been completed, the DineEquity board of directors intends to separate the chairman and CEO roles, a statement said.

Reporting preliminary results, DineEquity said it earned $21.1 million, or $1.18 a share, in the fourth quarter, down from $25 million, or $1.35 a share in the previous year's fourth quarter. Systemwide, comparable sales at IHOP slipped 2.1 percent while Applebee's sales dropped 7 percent.

Shares fell 2.3 percent to $64.26 in early trading Friday and have fallen 24 percent over the past three months.

Also announced Friday was the imminent departure of the company's CEO.

"I am honored to have led this extraordinary global company through significant periods of growth and transformation over the last 16 years," said Stewart, 61, who also has been serving as interim president of the Applebee's business unit. "It has been a privilege to lead two iconic brands, both Number one in their respective categories."

The board of directors has named its current lead director, Richard Dahl, to serve as interim chief executive officer and chairman starting March 1, 2017, while a search for a permanent replacement is underway. Dahl has served on the board of directors since February 2004.

"DineEquity will continue to invest in the long term success and growth of both IHOP and Applebee's. I will be working very closely with the Applebee's franchisees to improve performance," said Dahl.

"While a turnaround of Applebee's will not happen immediately, the results of a comprehensive diagnostic conducted by a world class management consulting firm has enhanced our understanding of what has driven our recent sales trends.

More importantly, we have a go-forward plan to improve performance, and have worked with the same firm to validate our initiatives and identify additional creative strategies to expeditiously return Applebee's to growth," Dahl said.

He also praised Stewart.

"For more than 16 years, Julia has been a strong and valued leader of DineEquity and the IHOP and Applebee's brands and has made numerous and lasting contributions to the business," Dahl said.

"Under Julia's leadership, DineEquity has become one of the largest full service, fully franchised chains in the world. She led the successful turnaround of IHOP early in her tenure, drove the acquisition and re- franchising of Applebee's and transitioned DineEquity to an asset light model. We thank Julia for her service to DineEquity's stockholders and her unwavering commitment to DineEquity and its franchisees."

-- City News Service, photo courtesy of DineEquity