Core Insights - The article emphasizes the expertise of the company in analyzing restaurant stocks across various segments in the U.S. market, including QSR, fast casual, casual dining, fine dining, and family dining [1] Group 1: Company Overview - The company is led by a founder with a strong background in Business Administration and Accounting, holding an MBA in Forensic Accounting and Controllership [1] - The company utilizes advanced analytical models and specialized valuation techniques to provide detailed insights and actionable strategies for investors [1] Group 2: Industry Engagement - The company actively participates in academic and journalistic initiatives, contributing to institutions that promote individual and economic freedom [1] - Previous contributions include writing columns on topics such as monetary policy, financial education, and financial modeling, aimed at making these subjects accessible to a broader audience [1]

Dine Brands hopes to boost sales this year with a wider swath of value meals and buzzier advertising after a rough 2024 for Applebee's and IHOP."We had a soft year in 2024, which disappoints us, but we're focused on improving that in 2025," Dine Brands CEO John Peyton told CNBC. "We've got to have compelling messages and compelling promotions and compelling reasons to drive traffic into the restaurants."Dine on Wednesday reported fourth-quarter U.S. same-store sales dropped 4.7% at Applebee's and 2.8% at IH ...

For the quarter ended December 2024, Dine Brands (DIN) reported revenue of $204.77 million, down 0.7% over the same period last year. EPS came in at $0.87, compared to $1.40 in the year-ago quarter.The reported revenue represents a surprise of +1.75% over the Zacks Consensus Estimate of $201.25 million. With the consensus EPS estimate being $1.35, the EPS surprise was -35.56%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determin ...

Financial Data and Key Metrics Changes - Dine Brands Global, Inc. generated $106.4 million in adjusted free cash flow for fiscal 2024, an increase from $103.3 million in the previous year, indicating financial stability [11][53] - Adjusted EBITDA for the full year was $239.8 million, down from $256.4 million in 2023, with Q4 adjusted EBITDA at $50.1 million compared to $62.2 million in the same quarter last year [12][51] - Total revenues decreased by 0.7% to $204.8 million in Q4, with a full-year revenue of $812.3 million, reflecting negative comps and a decrease in rental revenues [49][50] Business Line Data and Key Metrics Changes - IHOP experienced a full-year comp sales decline of 2%, with Q4 comp sales at negative 2.8% [13] - Applebee's comp sales were negative 4.2% for the full year and negative 4.7% in Q4, contrasting with previous growth [13][55] - The company took back 47 Applebee's restaurants in November, which contributed to an increase in company restaurant sales [12][49] Market Data and Key Metrics Changes - The macroeconomic environment in 2024 significantly impacted consumer spending, particularly among guests with household incomes under $75,000, who represent about two-thirds of the customer base [14] - Average weekly sales for Applebee's were $52.3 thousand, while IHOP's were $37.7 thousand, with off-premise sales contributing significantly to both brands [56] Company Strategy and Development Direction - The company aims to enhance guest experience through improved operations, menu enhancements, and dynamic marketing strategies [15][16] - Dine Brands Global plans to remodel 30 Applebee's restaurants under the "Lookin' Good" program and convert five to a dual-brand concept [17][25] - The dual-brand concept is a key part of the development strategy, with positive initial results from the first U.S. dual-brand location in Seguin, Texas [41][43] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2024 performance did not meet expectations but expressed confidence in the ability to improve in 2025 through targeted investments and enhanced execution [15][19] - The company is optimistic about international growth potential, particularly in Canada, Mexico, and the Middle East, and plans to expand dual-brand locations [39][40] Other Important Information - The company has initiated a nationwide search for a new leader for Applebee's following the resignation of Tony Moralejo [9][10] - G&A expenses for Q4 were $52.3 million, up from $50.5 million in the same period last year, but full-year G&A expenses decreased to $196.7 million [51] Q&A Session Summary Question: Marketing strategy and underperformance - Management acknowledged that guests are seeking value, particularly all-in meal value, and noted progress from recent promotions [70][72] Question: Total value incidents and Applebee's plans - The total mix for Applebee's was about 27-28%, with plans to expand the everyday value platform targeting singles, pairs, and groups [78][80] Question: Franchisee confidence in turnaround plan - Franchisees remain committed to investing in their brands, with strong cooperation and alignment on plans for 2025 [88][90] Question: IHOP's food cost outlook - IHOP expects low to mid-single-digit inflation primarily driven by egg prices, with no surcharges implemented by franchisees [106][107] Question: Innovation in 2024 and plans for 2025 - Management highlighted successful innovations, including the dual-brand concept and new menu items, with more innovations planned for 2025 [111][115]

Core Insights - Dine Brands (DIN) reported quarterly earnings of $0.87 per share, missing the Zacks Consensus Estimate of $1.35 per share, representing a -35.56% earnings surprise [1] - The company posted revenues of $204.77 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.75%, but down from $206.3 million year-over-year [2] - Dine Brands shares have declined approximately 22% year-to-date, contrasting with the S&P 500's decline of -1.8% [3] Earnings Performance - Over the last four quarters, Dine Brands has exceeded consensus EPS estimates twice [2] - The current consensus EPS estimate for the upcoming quarter is $1.33, with projected revenues of $202.96 million, and for the current fiscal year, the estimate is $5.70 on revenues of $809.5 million [7] Market Outlook - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] - The Zacks Rank for Dine Brands is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] - The Retail - Restaurants industry is currently in the top 28% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] Competitor Insights - Darden Restaurants (DRI), a competitor in the same industry, is expected to report quarterly earnings of $2.82 per share, reflecting a year-over-year increase of +7.6% [9] - Darden's anticipated revenues are $3.22 billion, representing an 8.2% increase from the previous year [10]

Revenue Generation and Franchise Operations - For the year ended December 31, 2024, approximately 83% of total revenues were generated from the two largest franchise operating segments, Applebee's and IHOP[15]. - The company generated revenue from four reporting segments, including franchise operations, rental operations, financing operations, and company restaurant operations[18]. - Approximately 89% of franchise segment revenue for the year ended December 31, 2024, consisted of royalties and advertising revenue from Applebee's, IHOP, and Fuzzy's[50]. - The Applebee's franchise agreements require domestic franchisees to contribute 3.25% of gross sales to a national advertising fund, which can be increased to a maximum of 5%[42]. - IHOP franchise agreements generally require a local advertising fee of 2.0% and a national advertising fee of 1.0% of weekly gross sales[43]. - The company derives a substantial portion of revenues from royalties based on gross sales of franchised restaurants, which may be negatively impacted by various external factors[162]. Restaurant Operations and Development - As of December 31, 2024, the company operated 3,555 restaurants across all brands, with 97.1% of Applebee's restaurants being franchisee-owned[23]. - As of December 31, 2024, there were 1,567 Applebee's franchised restaurants, 1,824 IHOP franchised and area licensed restaurants, and 116 Fuzzy's franchised restaurants[18]. - The company has signed commitments from IHOP franchisees to build 285 new restaurants over the next six years, including 179 under international development agreements[54]. - The company will continue to evaluate the addition of new brands to its restaurant portfolio through acquisitions and strategic investments[17]. - The company operates 1,454 Applebee's and 1,548 IHOP restaurants in the United States, with a total of 3,312 domestic restaurants[185]. - The international presence includes 243 restaurants across various countries, with 113 in Canada and 92 in Mexico[186]. Financial Performance and Stockholder Returns - The company reported net income of $64.9 million, or $4.22 per diluted share, in 2024, down from $97.2 million, or $6.22 per diluted share, in 2023, primarily due to lower gross profit[208]. - Approximately $43.4 million was returned to stockholders, including $31.3 million in cash dividends and $12.1 million in stock repurchases[208]. - The effective tax rate for 2024 was 27.5%, differing from the statutory Federal income tax rate of 21% due to state and local taxes[212]. - The combined system-wide sales of all brands declined to $8.0 billion, a 3.9% decrease compared to 2023[208]. Operational Challenges and Risks - The company experienced a cumulative inflation of over 20% since 2020, negatively impacting consumers' discretionary income and dining out expenditures[96]. - The company faces rising costs for commodities, labor, and healthcare, which have been exacerbated during fiscal 2024[97]. - The company is subject to various federal and state regulations regarding franchising, labor laws, and food safety, which could impact operations[76][81][83]. - The company is facing an increasing number of lawsuits, including employment-related claims, which could divert significant operational resources and harm business results[117]. - The company may experience shortages or interruptions in the supply of food and other products, which could limit operational capabilities and affect revenue[167]. Technology and Cybersecurity - The company emphasizes the importance of technology in operations, including point of sale systems and inventory management, to support corporate operations and mitigate risks[73]. - The company maintains a focus on cybersecurity, conducting annual audits and implementing encryption technologies to protect financial and personal information[74]. - The cybersecurity risk management program is integrated into the broader Enterprise Risk Management program, with regular assessments conducted throughout the year[182]. - The Chief Information Security Officer (CISO) leads the cybersecurity team and has 30 years of experience in the field[182]. Workforce and Diversity - The company employed 992 individuals, with 396 in company restaurants and 596 in corporate roles[91]. - The company has a diverse workforce, with 59% of corporate employees being male and 41% female, and 54% being white while 46% are people of color[91]. - The company has established Team Member Resource Groups to promote diversity and inclusion within its workforce[89]. - The company is committed to a comprehensive Total Rewards Program to ensure the health and well-being of its team members[86]. Legal and Regulatory Environment - The company is subject to extensive governmental regulations, and any failure to comply could result in losses and harm to its brands[126]. - Changes in U.S. government regulations and trade policies could materially impact the company's operations and financial condition[132]. - Franchise agreements require franchisees to defend and indemnify the company, but claims against franchisees may reduce their ability to make payments[119]. Market and Economic Conditions - Future epidemics or public health emergencies could disrupt operations, affecting sales, staffing, and overall financial results[146]. - Actual operating and financial results may differ from public guidance due to various uncertainties and risks[145]. - The company is subject to reputational risks if franchisees do not adhere to quality and trademark usage standards, which could adversely affect brand goodwill[159].

Revenue Performance - Total revenues for Q4 2024 were $204.8 million, a decrease from $206.3 million in Q4 2023, primarily due to lower franchise revenues[6] - Total revenues for the three months ended December 31, 2024, were $204.77 million, a slight decrease of 0.8% compared to $206.30 million in the same period of 2023[19] - The total system-wide sales for all brands decreased to $1,944.4 million in Q4 2024 from $2,046.2 million in Q4 2023, a decline of 5.0%[35] Comparable Sales - Applebee's domestic comparable same-restaurant sales declined by 4.7% year-over-year in Q4 2024, while IHOP's comparable sales declined by 2.8%[3] - For 2025, Applebee's comparable same-restaurant sales are expected to range between negative 2% and positive 1%, while IHOP's is expected to range between negative 1% and positive 2%[13] - Domestic same-restaurant sales for Applebee's decreased by 4.7% in Q4 2024 compared to a decrease of 0.5% in Q4 2023[35] Net Income and Earnings - GAAP net income available to common stockholders for 2024 was $63.0 million, or $4.22 per diluted share, down from $94.9 million, or $6.22 per diluted share in 2023[8] - Adjusted net income available to common stockholders for 2024 was $79.8 million, or adjusted earnings per diluted share of $5.34, compared to $101.4 million, or $6.65 per diluted share in 2023[8] - Net income for the twelve months ended December 31, 2024, was $64.89 million, down 33.0% from $97.18 million in 2023[19] - Basic net income available to common stockholders per share for the twelve months ended December 31, 2024, was $4.22, down from $6.23 in 2023[19] Cash Flow and Expenses - The company had adjusted free cash flow of $106.4 million for 2024, compared to $103.3 million in 2023[8] - Cash flows provided by operating activities for the twelve months ended December 31, 2024, were $108.16 million, down from $131.14 million in 2023[23] - Cash flows provided by operating activities for the twelve months ended December 31, 2024, were $108,160 thousand, a decrease from $131,140 thousand in 2023[28] Restaurant Operations - Development activity resulted in 65 new restaurant openings and the closure of 83 restaurants in 2024[8] - Total Applebee's restaurants at the end of Q4 2024 were 1,614, down from 1,642 at the end of Q4 2023, reflecting a net reduction of 28 restaurants over the year[39] - IHOP's total restaurants increased to 1,824 at the end of Q4 2024, up from 1,814 at the end of Q4 2023, indicating a net increase of 10 restaurants[39] Franchise Sales - Applebee's franchise restaurant sales decreased to $1,011.6 million in Q4 2024 from $1,088.6 million in Q4 2023, a decline of 7.1%[35] - IHOP franchise restaurant sales were $812.9 million in Q4 2024, down from $832.4 million in Q4 2023, representing a decrease of 2.7%[35] - Fuzzy's franchise restaurant sales fell to $39.0 million in Q4 2024 from $47.7 million in Q4 2023, a decline of 18.1%[35] Assets and Liabilities - Total current assets rose to $385.99 million as of December 31, 2024, compared to $357.78 million in 2023, reflecting a 7.9% increase[21] - Total liabilities increased to $2.01 billion in 2024 from $1.99 billion in 2023, marking a growth of 1.4%[21] - The company’s total assets increased to $1.79 billion in 2024 from $1.74 billion in 2023, representing a growth of 2.0%[21] Charges and Costs - The company incurred closure and impairment charges of $9.24 million for the twelve months ended December 31, 2024, compared to $3.59 million in 2023, indicating increased restructuring efforts[19] - The company reported closure and impairment charges of $7,798 thousand for the three months ended December 31, 2024, compared to $506 thousand in the same period of 2023[31] - The company incurred merger and acquisition costs of $804 thousand for the twelve months ended December 31, 2023[31] Sales Performance Metrics - Average weekly domestic unit sales for Applebee's were $51.0 thousand in Q4 2024, down from $52.6 thousand in Q4 2023[34] - Average weekly unit sales for IHOP were $37.9 thousand in Q4 2024, a decrease from $39.1 thousand in Q4 2023[34] - Company restaurant sales increased significantly to $8.42 million in Q4 2024 from $0.29 million in Q4 2023[19] Future Projections - G&A expenses for 2025 are expected to range between approximately $200 million and $205 million[13] - Capital expenditures for 2025 are expected to range between approximately $20 million and $30 million[13]

Core Viewpoint - Dine Brands (DIN) is positioned well to continue its trend of beating earnings estimates, making it a stock worth considering for investors [1]. Earnings Performance - Dine Brands has a strong history of surpassing earnings estimates, averaging a 5.95% beat over the last two quarters [2]. - In the most recent quarter, Dine Brands reported earnings of $1.44 per share, exceeding the expected $1.33 by 8.27%. The previous quarter also saw a beat, with actual earnings of $1.71 per share against an estimate of $1.65, resulting in a 3.64% surprise [3]. Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Dine Brands, supported by a positive Zacks Earnings ESP (Expected Surprise Prediction), indicating a strong likelihood of another earnings beat [4]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have historically produced positive surprises nearly 70% of the time, suggesting a high probability of Dine Brands beating estimates again [5]. Earnings ESP Metric - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [6]. - Dine Brands currently has an Earnings ESP of +1.92%, indicating recent bullish sentiment among analysts regarding the company's earnings prospects [7]. Importance of Earnings ESP - A negative Earnings ESP can reduce predictive power but does not necessarily indicate an earnings miss, as many companies can still beat consensus estimates [8]. - Checking a company's Earnings ESP before quarterly releases is crucial for increasing the odds of successful investment decisions [9].

Group 1 - The article discusses the strategy of paying a premium for quality stocks that are profitable and growing, which is generally considered a winning approach [1] - It highlights that growth stocks can sometimes become excessively expensive, leading to potential market distortions [1] - The author emphasizes a fundamental analysis approach, focusing on numerical data and maintaining skepticism towards company-reported pro-forma figures [1] Group 2 - The author has a beneficial long position in the shares of DIN, indicating a personal investment interest in the stock [2] - The article expresses the author's own opinions and is not influenced by compensation from any company mentioned [2] - There is a disclaimer that past performance does not guarantee future results, and no specific investment advice is provided [3]

Group 1 - Dine Brands (NYSE: DIN) shares have declined over 40% from their 52-week high due to softness in the casual dining sector [1] - The company's Applebee's business faced challenges in 2024, reporting negative comparable sales [1]