IHOP Profit Thins
Fourth-quarter earnings were thinner than a year ago at pancake chain
IHOP
(IHP)
, as the company cut back on franchise development.
The California-based company earned $8.8 million, or 41 cents a share in the quarter ended Dec. 31, compared with $12 million, or 56 cents a share, a year ago. The consensus forecast of analysts was for 47 cents a share, according to Thomson First Call. Revenue fell more than 4% to $102.8 million from $107.4 million in the year-ago period.
Overall sales increased 14.6% while comparable-store sales rose 6%, partly because of the success of a program to promote its stuffed crepes menu item.
"The reduction in net income performance for the fourth quarter 2003 was primarily due to the company franchising 30 fewer newly developed IHOP restaurants," the company said.
The company said its negative free cash flow was reduced to $9.2 million at year's end vs. $63.6 million at the end of 2002.
IHOP also repeated its 2004 earnings forecast of $1.65 to $1.75 a share, vs. consensus expectations of $1.75 a share.