Loading...
01/11 03:34
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Applebee's comp sales 3.1% increase year-over-year. Driven by new menu items, targeted marketing campaigns, and increased off-premise sales.
IHOP comp sales Negative 1.5% year-over-year. Despite the decline, positive traffic trends were noted, attributed to the launch of the IHOP Value menu and operational improvements.
Adjusted EBITDA $49 million, down from $61.9 million in the same quarter last year. Decline attributed to investments in company restaurants and temporary closures for remodels and dual brand conversions.
Adjusted free cash flow $68.2 million year-to-date, down from $77.8 million in the same period last year. Decrease due to increased CapEx investments in company-owned restaurants.
Consolidated total revenues $216.2 million, up 10.8% from $195 million in the prior year. Growth driven by an increase in company restaurant sales, offset by a decrease in franchise revenues.
Franchise revenues $161.3 million, down 3% from $166.4 million in the prior year. Decline due to lower advertising revenues and lease terminations.
G&A expenses $50.2 million, up from $45.4 million in the prior year. Increase due to compensation-related expenses and higher travel and conference costs.
Cash provided by operations $83.3 million, up from $77.7 million in the prior year. Increase due to favorable changes in working capital, including postponed tax and interest payments.
CapEx $21.3 million year-to-date, up from $10.3 million in the prior year. Increase due to investments in company-owned restaurants.
Unrestricted cash $168 million, down from $194.2 million at the end of the second quarter. Decrease due to share repurchases and dividend payments.
New menu items: Applebee's introduced Chicken Parmesan Fettuccine and Ultimate Trio appetizer sampler, which contributed significantly to sales and traffic growth. IHOP launched its Value menu, which is part of its core offering for the first time.
Dual-branded restaurants: Dine Brands is expanding its dual-branded restaurant concept, combining Applebee's and IHOP under one roof. These restaurants are showing 1.5x to 2.5x higher sales post-conversion and nearly doubling 4-wall margins.
International expansion: Dine Brands is on track to double its international dual-branded restaurants to 40 by year-end, showcasing strong engagement with franchisees.
Off-premise sales: Applebee's off-premise sales grew by 9% in Q3, driven by digital promotions and limited-time offers. IHOP also saw improvements in off-premise channels.
Operational efficiencies: Applebee's remodeled approximately 80 restaurants, improving guest satisfaction and sales. IHOP reduced table turn times to multi-year lows, enhancing operational efficiency.
Capital allocation: Dine Brands reduced its dividend to allocate more capital to share repurchases, planning to buy back at least $50 million in shares over the next two quarters.
Franchisee alignment: Franchisees are aligned with the company's strategies, with strong participation in remodeling and dual-brand initiatives.
Macroeconomic Anxiety: Higher macroeconomic anxiety is leading to more intentional consumer decision-making, with guests trading down to lower-priced menu items, potentially impacting revenue and profitability.
Commodity Costs: Increased commodity costs, particularly for beef, seafood, eggs, pork, and coffee, are pressuring margins. Applebee's expects flat costs, while IHOP anticipates mid-single-digit increases.
Franchise Revenue Decline: Franchise revenues decreased by 3%, driven by lower advertising revenues and lease terminations, which could impact overall financial performance.
Adjusted EBITDA Decline: Adjusted EBITDA decreased from $61.9 million to $49 million year-over-year, reflecting operational and financial challenges.
Temporary Restaurant Closures: Approximately 10% of restaurants were temporarily closed in Q3 for remodeling and dual-brand conversions, with an even greater number expected in Q4, impacting revenue.
G&A Expense Increase: General and administrative expenses increased to $50.2 million, up from $45.4 million, due to higher compensation, travel, and conference costs, which could strain profitability.
Dividend Reduction: The dividend was reduced from $0.51 to $0.19 per share per quarter to fund share repurchases, which may affect investor sentiment.
IHOP Sales Decline: IHOP reported a 1.5% decline in same-restaurant sales, indicating challenges in maintaining growth.
Supply Chain Tariffs: Uncertainty around tariffs and trade policies could further impact commodity costs and supply chain stability.
Revenue Expectations: Maintaining full-year financial guidance, with EBITDA anticipated to be on the low end of the range due to investments in company restaurants, including remodeling and dual-brand conversions.
Dual Brand Strategy: Plans to open approximately 30 dual-branded restaurants by year-end 2025 and at least 50 in 2026. Long-term potential for approximately 900 dual-branded restaurants over the next decade. Dual-branded restaurants are expected to drive higher sales (1.5x to 2.5x post-conversion) and nearly double 4-wall margins.
International Expansion: On track to double total international dual-brand restaurants to 40 by the end of 2025. Positive engagement with international franchisees around development.
Capital Allocation: Reduction of quarterly dividend from $0.51 to $0.19 per share to focus on share repurchases. Commitment to buy back at least $50 million of shares over the next two quarters, representing an 11%-13% share reduction at current prices.
Commodity Costs: Applebee's commodity costs expected to remain flat for 2025, while IHOP's are expected to increase by mid-single digits due to elevated egg, pork, and coffee prices.
Menu Innovation: Continued introduction of new menu items, including premium offerings and limited-time breakfasts at IHOP in Q4 2025. Applebee's to add a new appetizer and entree each quarter.
Off-Premise Growth: Applebee's off-premise sales grew 9% in Q3 2025, with continued focus on digital promotions and limited-time offers to drive growth.
Franchisee Support: Ongoing investments in franchisee profitability initiatives, including remodeling incentives and operational improvements.
Dividend Payment: Paid $7.8 million in dividends in Q3 2025.
Dividend Reduction: Quarterly dividend reduced from $0.51 per share to $0.19 per share, implying an annual yield of approximately 3%.
Share Repurchase: Repurchased $22.5 million in stock in Q3 2025.
Future Share Buyback Commitment: Committed to buy back at least $50 million of shares over the next 2 quarters, representing an 11%-13% share reduction at the current price.
Year-to-Date Share Repurchase: Repurchased approximately 8.5% of shares year-to-date, totaling nearly 20% reduction in shares versus the beginning 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.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
