GLENDALE, Calif.—Pancake-house operator IHOP Corp. said Monday first-quarter net income fell 24 percent, due to costs related to an acquisition.
Quarterly profit totaled $8.6 million, or 50 cents per share, compared with $11.3 million, or 63 cents per share last year. The decline is mainly due to higher interest expense from financing its Applebee's acquisition, and higher general and administrative expenses related to Applebee's.
IHOP bought Lenexa, Kan.-based Applebee's International Inc. for $1.9 billion in November.
Revenue rose to $442.8 million from $90.1 million last year, due to the addition of Applebee's results.
Same-store sales, or sales in stores open at least one year, rose 3.7 percent during the quarter at IHOP restaurants and rose 0.5 percent at Applebee's.
IHOP said its plan to sell and leaseback 191 company-owned restaurants has been "challenged" by weak credit-market conditions. IHOP said it is continuing to negotiate with several parties and said it will decide if the deal terms are appropriate during the second-quarter of 2008.
IHOP also said it expects same-store sales to grow 2 percent to 4 percent in fiscal 208 at IHOP and 1 percent to 2 percent at Applebee's.
