Economic Woes Eat Into IHOP and Applebee's Sales

DineEquity Inc., the holding company for IHOP and newly acquired Applebee's, downgraded its fiscal 2008 outlook. Chairman and CEO Julia Stewart blames Applebee's third quarter same-store sales negativity and IHOP's nearly flat results in the "very challenging" economic climate.

The firm plans to redouble its value marketing efforts with new promotions to retain and attract customers for the last quarter of 2008.

It looks like the $5 sub sandwiches and other value menu items of quick-service restaurants are pulling away customers from previously stellar casual-dining chains like IHOP.