Results at the IHOP chain are solid, with AWS growth, the analyst notes. However, growth at Applebee's decelerated, suggesting continued negative SSS near term.

Applebee's closed 12 net stores in the quarter, and IHOP opened no net stores. 

Considering the sluggishness, the analyst lowered Applebee's SSS in Q3 to (4%), from +2.0% prior, and reduced IHOP estimate to +2.5% from +3%.

Both brands have strong value propositions and are leaning into value, but are also over-indexed to lower-income consumers, which are most apt to trade down in the menu or out of full service.

While macro pressures near term negatively impact DIN, the analyst views the shares as attractive, trading at 7.6x our '24E EBITDA (positive new store growth and a ~100% franchise model). 

Price Action: DIN shares are trading lower by 0.5% to $57.36 on the last check Friday.