New menu in the works for IHOP

by Monica Watrous    View Me on Google+
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GLENDALE, CALIF. — A menu transformation is under way for IHOP, with new and improved items and an updated look.

“In order to truly transform the menu, it has to evolve, so this will be a journey throughout 2014 and beyond,” said Julia Stewart, chairman and chief executive officer of parent company DineEquity, Inc., during a May 1 call to discuss first-quarter earnings. “The objectives of our three core menu enhancements in 2014 are to introduce new and improved products, further simplify the menu and improve the actual menu design.”

Simplification will involve reducing the number of items and limited-time offers while cross-utilizing ingredients to eliminate complexities in the kitchen.

IHOP is releasing its new menu section by section. Crepes were the focus of February changes, with the addition of new sweet and savory crepes.

“We also added a number of bolder options throughout the menu for guests desiring something with a spicier flavor,” Ms. Stewart said. “It included things like new omelets and a chicken-and-chorizo burrito.”

In June, the casual-dining chain will evolve its lunch and dinner items with four new sandwiches and a new burger.

“Our new sandwiches and burger offer unique and popular flavor profiles, further adding to the variety on the menu within these categories,” Ms. Stewart said.

Salads also will be a highlight of the new June menu, with the introduction of three made-to-order options.

“The third menu, slated for November of this year, will concentrate on our kids’ menu,” Ms. Stewart said. “As a leader in family dining, we know providing options for families with kids is important, so we will add a variety of customizable entrees for younger guests. We believe this will appeal to parents who also want healthier options.”

Menu innovation is part of a larger strategy to generate positive sales and traffic at the chain. Other components of IHOP’s plan include improving operations and training to ensure franchisees continue to meet or exceed company standards, targeting both existing and potential customers through advertising and media, and providing better value, service and ambiance.

“Our objective is to capitalize on IHOP’s strengths and opportunities to broaden the brand’s appeal across key growth demographics, such as millennials and baby boomers,” Ms. Stewart said.

For the first quarter, IHOP’s domestic system-wide same-restaurant sales increased 3.9%, while DineEquity’s other brand, Applebee’s Neighborhood Grill & Bar, posted a decline in domestic system-wide same-restaurant sales of 0.5%.

Net income for the quarter ended March 31 was $20,824,000, equal to $1.09 per share on the common stock, which compared with $18,239,000, or 95c per share, in the prior year period. Segment revenues totaled $167,201,000, up from $163,169,000.
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