MW Applebee's 'underwhelming' $9.99 meal deal draws downgrade for Dine Brands

By Steve Gelsi

Analyst cuts Dine Brands to neutral after the 'Really Big Meal Deal' offers value but doesn't improve same-store sales at Applebee's

Applebee's parent Dine Brands Global Inc.'s push to offer a value meal deal to cost-wary consumers has failed to boost sales at the massive restaurant chain, an analyst at Wedbush said Friday.

"While we were optimistic that the launch of the 'Really Big Meal Deal'at a $9.99 price point would result in a step-change in Applebee's same-store sales growth trajectory, the results have been underwhelming," Wedbush's Nick Setyan said.

He downgraded Dine Brands' stock (DIN) to neutral from outperform and cut its price target to $28 a share from $47 a share.

Dine Brands' stock fell 1.9% in premarket trading on Friday.

Wedbush's Setyan is also "skeptical" that a value push at International House of Pancakes (IHOP), another chain Dine Brands owns, will boost same-store sales.

Setyan reiterated an estimated fourth-quarter same-store sales drop of 3.5% for Applebee's and a drop of 2% for IHOP.

Dine Brands is due to report its fourth-quarter results on March 5.

Setyan didn't provide any analysis on why the Applebee's value meals didn't provide a boost other than citing "industry trends," but he said he now expects weaker same-store sales in the current quarter and full-year 2025.

For the first quarter, he cut his same-store sales estimate for Applebee's to a drop of 1.5% from his previous view for an increase of 1%. For full-year 2025, he now expects Applebee's same-store sales to increase by about 0.3% instead of 1%.

The Applebee's "Really Big Meal" deal includes the choice of the "Big Cluckin" chicken sandwich or a "Big Classic Bacon Cheeseburger" along with "endless" french fries and a fountain drink, with free refills for dine-in customers for a promotional price of $9.99.

Prior to Friday's moves, Dine Brands stock has fallen by 14% in 2025, while the S&P 500 SPX is down by 0.3%.

-Steve Gelsi

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February 28, 2025 08:13 ET (13:13 GMT)

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