Q3 sales increase across restaurant sector

Even though industry giant McDonald’s continued to struggle driving sales in the third quarter, restaurant companies across the industry broadly reported better success at growing comparable sales, including Buffalo Wild Wings, Denny’s, and IHOP and Applebee’s parent DineEquity Inc. 1851 Magazine compiled highlights of their performance in the third quarter. Buffalo Wild Wings Strong same-store sales drove profit growth in excess of 20 percent for Minneapolis-based Buffalo Wild Wings in the third quarter, while favorable trends in its food costs offset some labor inflation related to its long-term strategy to change its service model. For the Sept. 28-ended third quarter, Buffalo Wild Wings’ net income rose 21.7 percent to $21.8 million, or $1.14 per diluted share, compared with $17.9 million, or 95 cents per diluted share, a year earlier. Revenue grew 18.3 percent to $373.5 million, reflecting same-store sales gains of 6 percent at company-owned restaurants and 5.7 percent at franchised locations. Chief executive Sally Smith noted in a statement that the brand benefited from this summer’s World Cup, which brought new guests to the restaurants and built momentum for the beginning of the chain’s core football season. Investments in its “Guest Experience” service model also continued to bear fruit, Smith said, adding that the higher labor costs incurred as Buffalo Wild Wings adds “Guest Experience Captains” to the dining room would lead to higher sales growth in the long term and would be offset in the near term by favorable conditions elsewhere. Denny’s The Spartanburg, South Carolina-based family-dining chain also reported a leap in net income for its third quarter, growing profit 18.7 percent to $8.3 million, or 10 cents per diluted share, compared with $7 million, or cents per diluted share, a year earlier. Denny’s revenue was essentially flat for the Sept. 24-ended period, reflecting four fewer franchised locations open during the quarter, but same-store sales rose 2.4 percent, comprising a 4.1-percent gain at company-owned Denny’s restaurants and a 2.1-percent increase at franchised locations. Denny’s president and chief executive, John Miller, credited the chain’s ongoing brand revitalization plan that has encompassed menu, service and store design, specifically the “Heritage” remodel program. Denny’s systemwide quarterly same-store sales gain was its highest in two and a half years, including the best company-owned same-store sales result in eight years, Miller said. DineEquity Glendale, California-based DineEquity also had sales growth to report for family- and casual-dining restaurant brands, as the franchisor of the IHOP and Applebee’s brands. For the Sept. 30-ended third quarter, DineEquity reported systemwide same-store sales increases of 2.4 percent at IHOP and 1.7 percent at Applebee’s. The company also revised its full-year guidance for both brands’ same-store sales upward, reflecting momentum of recently positive trends sustaining into the fourth quarter. DineEquity’s net income rose 0.8 percent to $18.9 million, or 99 cents per diluted share, compared with $18.7 million, or 97 cents per diluted share, a year earlier. Revenue rose 1 percent to $162.9 million.