IHOP announces drop in net income

IHOP Corp. executives reported an 11.2% drop in third-quarter net

income Tuesday and said its financial performance in the fourth

quarter is expected to be below previous expectations.

Officials at the Glendale-based pancake chain cited the continued

effect of company-store openings; related timing of sales of

franchises; recent weakness in company-store sales growth; and

continued uncertainty with regard to the consumer-spending

environment.

“While we remain on track to add 80 to 90 IHOP-developed stores to

the IHOP system this year, the timing of franchising those new

restaurants has lagged -- particularly in new markets where we do not

always have the benefit of an existing franchisee base to build

upon,” IHOP CEO Julia A. Stewart released in a statement. “We have

made decisions to open restaurants as company-operated in these

locations rather than rely on new or inexperienced franchisees to

best establish IHOP as a viable competitor in these markets.”

Gretchen Hoffman