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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: revenue growth and shareholder returns are positives, but declining EBITDA, comp sales, and adjusted EPS are concerns. The Q&A reveals optimism for upcoming quarters, yet lacks clarity on certain financial impacts, causing uncertainty. Despite risks like consumer behavior and supply chain challenges, the overall sentiment remains neutral, with no strong catalysts for significant stock price movement in the near term.
EBITDA $54.7 million, a decrease of $6.1 million (10%) from $60.8 million in Q1 2024.
Revenues $214.8 million, an increase of 4.1% from $206.2 million in Q1 2024.
Comp Sales (Applebee's) -2.2%, a decline compared to the previous year.
Comp Sales (IHOP) -2.7%, a decline compared to the previous year.
Adjusted Free Cash Flow $14.6 million, a decrease of $15.1 million from $29.7 million in Q1 2024.
Cash Provided by Operations $16.1 million, a decrease from $30.6 million in Q1 2024.
G&A Expenses $51.3 million, down from $52.2 million in Q1 2024.
Adjusted Diluted EPS $1.03, a decrease from $1.33 in Q1 2024.
CapEx $3.3 million, unchanged from Q1 2024.
Unrestricted Cash $186.5 million, a slight decrease from $186.7 million at the end of Q4 2024.
Commodity Costs (Applebee's) Increased by 0.5% compared to the prior year.
Commodity Costs (IHOP) Increased by 8.4% compared to the prior year.
Share Repurchases $1.6 million in shares repurchased.
Dividends Paid $7.8 million in dividends.
New Menu Items: In Q1, Applebee's launched the Big Easy menu, featuring two new Bourbon Street Cajun pasta dishes starting at $11.99.
Loyalty Program Expansion: Applebee's made its date night promotion exclusively available through the Club Applebee's loyalty program, resulting in over 175,000 new signups.
International Expansion: Plans to open 13 additional dual brand restaurants and complete 10 dual conversions this year, including the first dual brand in Costa Rica.
Domestic Dual Brand Openings: Targeting 14 domestic dual brand openings this year, with strong performance from the first dual brand in Seguin, Texas.
Operational Efficiency: Implemented projects resulting in over $14 million of annualized savings across both systems.
Restaurant Takebacks: Took back 10 IHOP restaurants in Cincinnati and 47 Applebee's in Q4 2024, with plans for remodeling and dual-brand conversions.
Leadership Continuity: John Peyton will continue as President of Applebee's to ensure stability and accelerate business growth.
Focus on Value Programs: Renewed focus on elevating guest experience, enhancing menu and value programs, and better communicating brand value.
Consumer Behavior Risks: Consumer confidence has declined, leading to cautious spending, particularly among lower-income guests. This has resulted in a shift towards lower-priced menu items.
Supply Chain Challenges: Recent global trade tensions have introduced uncertainty, with potential impacts from tariffs. Approximately 13% of IHOP and 10% of Applebee's market basket is sourced internationally.
Commodity Cost Increases: Commodity costs for IHOP increased by 8.4%, driven by elevated egg pricing due to avian influenza. Applebee's commodity costs increased by 0.5%.
Franchise Revenue Decline: Franchise revenues decreased by 5.5% compared to the previous year, indicating potential challenges in franchisee performance.
Labor Costs Stability: While labor costs remain stable, the ongoing staffing challenges reported by franchisees could pose risks to operational efficiency.
Economic Factors: The overall economic environment remains challenging, with macroeconomic headwinds impacting consumer spending and restaurant traffic.
Key Priorities: Dine Brands is focusing on three key priorities: elevating the guest experience, enhancing menu and value programs, and better communicating the value offered to guests.
Applebee's Leadership: John Peyton will continue to serve as President of Applebee's to ensure stability and accelerate business growth.
Menu Innovation: Applebee's is introducing a new menu item every quarter, with the recent launch of the Big Easy menu.
Loyalty Program: Club Applebee's has over 8.5 million members, with exclusive promotions to deepen guest connections.
IHOP Initiatives: IHOP is focusing on the House Faves value menu, core breakfast items, streamlining operations, and enhancing marketing.
Dual Brand Expansion: Plans to open 13 additional dual brand restaurants and complete 10 dual conversions this year.
Remodeling Program: Approximately 100 franchise and corporate restaurants are expected to be remodeled by the end of the year.
Revenue Expectations: Total revenues increased 4.1% to $214.8 million in Q1 2025.
CapEx: CapEx through Q1 of 2025 was $3.3 million.
Commodity Costs: Expect commodity costs at Applebee's to be flat to slightly down, while IHOP's costs are expected to increase by mid-single digits.
Full Year Guidance: Maintaining full year financial guidance at this time.
Free Cash Flow: Adjusted free cash flow was $14.6 million for Q1 2025.
Shareholder Returns: Repurchased $1.6 million in shares and paid $7.8 million in dividends in Q1 2025.
Dividends Paid: $7.8 million in dividends in Q1 of 2025.
Share Repurchase: Repurchased $1.6 million in shares in Q1 of 2025.
The earnings call presents a mixed picture. Positive factors include stable sales momentum, successful upselling strategies, and a promising dual-branded restaurant concept. However, increased expenses, reduced EBITDA guidance, and the impact of restaurant disruptions offset these positives. The dividend cut for share repurchases and lack of clear guidance on dual-branded conversions add uncertainty. Overall, these mixed signals suggest a neutral impact on the stock price.
The earnings call presents mixed signals: revenue growth and positive Applebee's sales are offset by IHOP's negative sales, decreased EBITDA, and increased expenses. The Q&A reveals operational improvements but also management's vague responses on profitability timelines. Shareholder returns are stable, but CapEx increases may strain cash flow. The market may react neutrally, as positive and negative factors balance each other out.
The earnings call presents a mixed picture: revenue growth and shareholder returns are positives, but declining EBITDA, comp sales, and adjusted EPS are concerns. The Q&A reveals optimism for upcoming quarters, yet lacks clarity on certain financial impacts, causing uncertainty. Despite risks like consumer behavior and supply chain challenges, the overall sentiment remains neutral, with no strong catalysts for significant stock price movement in the near term.
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