Casual dining continues to take a hit as Applebee’s announced 40-60 restaurants would be closing this year. If the situation couldn’t get any worse, the CEO and CFO have left the company according to this Business Insider report.
Applebee’s will close between 40 and 60 locations this year.
DineEquity, Applebee’s parent company, confirmed the news Wednesday.
“We believe that restaurant closures are an important tool to preserving the financial health of the system,” acting CEO Richard Dahl said in a call to investors this week. The company’s CEO and CFO have both resigned in recent weeks.
DineEquity reported fourth quarter earnings this week. Revenue was down 10% to $154.2 million from $171.3 in the same quarter last year. Adjusted earnings per share were $1.37 compared to $1.59 in the same period of 2015, driven by lower gross profit. This was caused by a 7.2% decline in Applebee’s same-store sales, said interim CFO Gregg Kalvin.
Applebee’s, which closed 46 locations in 2016, is suffering from an industry-wide slowdown that many analysts fear could be the beginning of a restaurant recession.
“Obviously, we are not immune to the pressures faced by the category during in the fourth quarter, particularly in December, which was the worst for casual dining sales and traffic during 2016,” Dahl said to investors.