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The portion of Applebee's and IHOP orders that went toward value offerings rose from the final quarter of 2024 to the first fiscal quarter, their parent company said, making up more than a third of orders at Applebee's. Dine Brands Global CEO John Peyton said value orders' popularity is "at the higher end" of what the company has seen in recent years. Restaurants will continue to lean into deals since there is widespread concern about spending among consumers, Peyton said.

Americans are eating up value meals at diners and for dinners.

Customers are ordering cheaper items while watching their tabs at restaurants, according to executives at Dine Brands Global (DIN), parent company of Applebee’s, IHOP and Fuzzy’s Taco Shop. It's the latest restaurant operator to report signs of strain among consumers: McDonald's (MCD) said last week that middle-income customers are cutting back, and Wendy's recently (WEN) lowered its 2025 outlook.

The portion of all Applebee’s spending that went toward "value" offerings rose from 28% in the final quarter of 2024 to 34% in the first quarter, CEO John Peyton said during a conference call Wednesday. At IHOP, that ratio went from 16% to 19% in the quarter ended March 31, Peyton said.

“Guests remain cautious with their spending, particularly the lower-income guest," Peyton said, according to a transcript made available by AlphaSense. "And we continue to see check management and trade-down to lower-priced items." Value meals’ popularity is “at the high end” of what the company has seen in recent years, Peyton said.

Dine Brands is “comfortable” with how frequently they’re ordered because demand for deals is so widespread, he said. In fact, IHOP is testing the idea of extending "House Faves” specials, which include combos like a ham and cheese omelette and two buttermilk pancakes for $6, beyond the work week in some markets, executives said.

"The 'House Faves' menu was the key driver for traffic," Peyton said.

Same-restaurant sales were down 2.2% year-over-year at Applebee’s mostly because traffic was lower, the company said in a Securities and Exchange Commission filing. Same-restaurant sales fell 2.7% at IHOP, where patronage and the average check also declined, the filing said.

Shares of Dine Brands were recently up 2%. Prices remain more than 50% lower than they were a year ago.

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