Financial Data and Key Metrics Changes - Consolidated total revenues increased by 11.9% to $230.8 million in Q2 compared to $206.3 million in the prior year, primarily driven by an increase in company restaurant sales [25] - Adjusted EBITDA decreased to $56.2 million from $67 million in the previous year [26] - Adjusted diluted EPS for 2025 was $1.17 compared to $1.71 for 2024 [26] - Adjusted free cash flow was $48.7 million compared to $52.9 million for the same period last year [27] Business Line Data and Key Metrics Changes - Applebee's reported a 4.9% increase in comparable sales, while IHOP posted a negative 2.3% in comparable sales [7][29] - Average weekly sales for Applebee's were $58,000, including approximately $12,800 from off-premise sales, which accounted for 22% of total sales [29] - IHOP's average weekly sales were $37,800, with $7,600 from off-premise sales, representing 20% of total sales [29] Market Data and Key Metrics Changes - Applebee's value mix was approximately 30% in Q2, while IHOP's value mix was about 19% [7] - Off-premise sales for Applebee's saw a positive lift of 7.6% in Q2 [29] - IHOP's House Faves menu drove incremental traffic and dollar margin for franchisees, leading to a sequential improvement in comparable sales [14] Company Strategy and Development Direction - The company is focused on enhancing menu and value platforms, improving marketing communication, and elevating guest experience [6] - Strategic investments are being made to modernize the brand and improve operations, including remodeling efforts and dual brand conversions [20][21] - The company plans to open at least a dozen dual brand restaurants by year-end, leveraging the complementary nature of Applebee's and IHOP [23] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are still feeling macroeconomic pressure, leading to changes in ordering behavior [6] - The company remains confident in its strategy to drive traffic, sales, and unit growth, with updated guidance reflecting positive trends [34] - Management expressed optimism about the potential for international expansion and new restaurant formats [19] Other Important Information - The company completed a refinancing transaction with new senior secured notes of $600 million at a fixed rate of 6.72% [28] - G&A expenses increased to $50.8 million due to higher compensation and professional services fees [26] - The company added 12 Applebee's to its portfolio, now operating a total of 70 company-operated restaurants [19] Q&A Session Summary Question: Performance at Applebee's and sustaining operations with frequent menu changes - Management confirmed strong performance driven by the two for 25 platform and emphasized effective training and processes to manage complexity [39][41] Question: Impact of the House Faves platform on franchisee profitability - Management indicated positive results from the House Faves program, leading to an expansion to seven days a week [47][49] Question: Path forward with corporate-owned stores and timeline for profitability - Management expects a timeline of approximately three years to improve operations and refranchise the restaurants for appropriate valuation [53][56]

PART I. FINANCIAL INFORMATION [Item 1—Financial Statements](index=4&type=section&id=Item%201—Financial%20Statements) This section presents the unaudited consolidated financial statements and comprehensive notes for Dine Brands Global, Inc. and its subsidiaries [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the Company's financial position, detailing assets, liabilities, and stockholders' deficit at specific points in time | Metric | June 30, 2025 (Unaudited) (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------- | :------------------------------- | | Total Assets | $1,789,947 | $1,790,584 | | Total Liabilities | $2,002,492 | $2,006,603 | | Total Stockholders' Deficit | $(212,545) | $(216,019) | - Total assets slightly decreased from **$1,790,584 thousand** at December 31, 2024, to **$1,789,947 thousand** at June 30, 2025. Total liabilities also saw a minor decrease from **$2,006,603 thousand** to **$2,002,492 thousand**. The stockholders' deficit improved from **$(216,019) thousand** to **$(212,545) thousand**[11](index=11&type=chunk) [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section details the Company's financial performance over specific periods, including revenues, costs, net income, and diluted earnings per share | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $230,784 | $206,267 | $445,564 | $412,502 | | Total Cost of Revenues | $138,555 | $106,996 | $263,025 | $215,807 | | Gross Profit | $92,229 | $99,271 | $182,539 | $196,695 | | Income Before Income Taxes | $18,931 | $31,224 | $31,726 | $55,270 | | Net Income | $13,814 | $23,182 | $22,011 | $40,655 | | Diluted EPS | $0.89 | $1.50 | $1.41 | $2.64 | - For the three months ended June 30, 2025, total revenues increased by **$24.5 million (11.9%)** year-over-year, while net income decreased by **$9.4 million (40.6%)**. Diluted EPS also saw a significant decline from **$1.50** to **$0.89**. For the six months ended June 30, 2025, total revenues increased by **$33.1 million (8.0%)** year-over-year, but net income decreased by **$18.6 million (45.8%)**, and diluted EPS fell from **$2.64** to **$1.41**[14](index=14&type=chunk)[155](index=155&type=chunk) [Consolidated Statements of Stockholders' Deficit](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Deficit) This section outlines changes in the Company's equity, including common stock, retained earnings, and treasury stock, over specific periods | Metric (in thousands) | Balance at Dec 31, 2024 | Balance at Jun 30, 2025 | | :-------------------------------- | :---------------------- | :---------------------- | | Common Stock Amount | $248 | $247 | | Additional Paid-in Capital | $254,814 | $236,117 | | Retained Earnings | $183,614 | $189,849 | | Accumulated Other Comprehensive Loss | $(76) | $(73) | | Treasury Stock Cost | $(654,619) | $(638,685) | | Total Stockholders' Deficit | $(216,019) | $(212,545) | - The total stockholders' deficit improved from **$(216,019) thousand** at December 31, 2024, to **$(212,545) thousand** at June 30, 2025, primarily driven by net income of **$22,011 thousand** and a decrease in treasury stock cost, partially offset by dividends paid and a decrease in additional paid-in capital[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities over specific periods | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Cash flows from operating activities | $53,105 | $52,179 | | Cash flows used in investing activities | $(5,185) | $(1,072) | | Cash flows used in financing activities | $(33,314) | $(33,308) | | Net change in cash, cash equivalents and restricted cash | $14,606 | $17,799 | | Cash, cash equivalents and restricted cash at end of period | $263,204 | $218,391 | - Cash flows from operating activities slightly increased by **$0.9 million** year-over-year. However, cash used in investing activities significantly increased by **$4.1 million**, primarily due to higher additions to property and equipment and long-term receivables. Net change in cash, cash equivalents, and restricted cash decreased by **$3.2 million**[20](index=20&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements, clarifying accounting policies and significant estimates [1. General](index=11&type=section&id=1.%20General) This section confirms the unaudited financial statements adhere to U.S. GAAP for interim reporting, with management affirming fair presentation - The unaudited consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and do not include all information required for complete annual statements. Management's opinion is that all necessary adjustments have been included for fair presentation[22](index=22&type=chunk) [2. Basis of Presentation](index=11&type=section&id=2.%20Basis%20of%20Presentation) This section outlines the Company's fiscal quarter end dates and the significant estimates used in preparing the financial statements - The Company's fiscal quarters end on the Sunday closest to the last day of each calendar quarter. Significant estimates are made in areas such as asset impairment, income taxes, doubtful accounts, lease accounting, contingencies, and stock-based compensation, which are evaluated based on historical experience and current conditions[24](index=24&type=chunk)[26](index=26&type=chunk) [3. Recent Accounting Pronouncements](index=11&type=section&id=3.%20Recent%20Accounting%20Pronouncements) This section discusses the adoption of new accounting standards and the evaluation of their potential impact on future financial disclosures - The Company adopted ASU No. 2023-07, "Segment Reporting," effective January 1, 2025, which did not impact the consolidated financial statements. The Company is currently evaluating ASU No. 2023-09, "Income Taxes," and ASU No. 2024-03, "Disaggregation of Income Statement Expenses," for their potential impact on future disclosures[27](index=27&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk) [4. Revenues](index=12&type=section&id=4.%20Revenues) This section details the Company's revenue recognition policies for franchise fees, royalties, advertising fees, and company restaurant sales - Franchise revenues are recognized over the term of the franchise agreement for fees, and when franchisee sales occur for royalties and advertising fees. Company restaurant sales are recognized when food and beverage items are sold[32](index=32&type=chunk)[36](index=36&type=chunk)[38](index=38&type=chunk) Franchise Revenue by Type (in millions) | Franchise Revenue Type (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Royalties | $82.1 | $80.6 | $158.4 | $160.7 | | Advertising revenues | $73.5 | $74.5 | $144.0 | $149.8 | | Proprietary product sales and other | $16.4 | $18.9 | $33.4 | $36.9 | | Franchise and development fees | $2.7 | $2.5 | $5.1 | $5.0 | | Total franchise revenues | $174.7 | $176.5 | $340.9 | $352.4 | - Total franchise revenues decreased by **$1.8 million (1.0%)** for the three months ended June 30, 2025, and by **$11.5 million (3.3%)** for the six months ended June 30, 2025, compared to the prior year periods[39](index=39&type=chunk) [5. Receivables and Current Expected Credit Losses ("CECL")](index=13&type=section&id=5.%20Receivables%20and%20Current%20Expected%20Credit%20Losses%20(%22CECL%22)) This section explains the Company's methodology for measuring expected credit losses on financial instruments and details various receivable types - The Company applies the CECL methodology to measure expected credit losses on financial instruments, establishing specific reserves for at-risk franchisee accounts and an allowance for others based on historical losses, current conditions, and forecasts[40](index=40&type=chunk) Receivable Type (in millions) | Receivable Type (in millions) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Accounts receivable | $79.1 | $72.0 | | Gift card receivable | $7.0 | $34.7 | | Notes receivable | $16.9 | $14.7 | | Equipment leases receivable | $9.5 | $13.2 | | Real estate leases receivable | $17.6 | $18.3 | | Other receivables | $1.1 | $2.9 | | Less: allowance for credit losses and notes receivable | $(6.4) | $(4.7) | | Total Long-term receivables | $33.5 | $35.9 | - The allowance for credit losses increased from **$4.7 million** at December 31, 2024, to **$6.4 million** at June 30, 2025, primarily due to bad debt expense of **$3.2 million**, partially offset by write-offs of **$1.3 million**[49](index=49&type=chunk) [6. Leases](index=15&type=section&id=6.%20Leases) This section details the Company's lease arrangements as both a lessee and lessor, primarily for restaurant properties - The Company acts as both a lessee and lessor, primarily leasing real property for IHOP and Applebee's restaurants. As of June 30, 2025, the Company leases **488 IHOP franchisee-operated restaurants** and **70 company-owned restaurants**[51](index=51&type=chunk) Lease Cost (in millions) | Lease Cost (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Finance lease cost | $1.4 | $1.4 | $2.8 | $2.8 | | Operating lease cost | $20.5 | $18.3 | $40.4 | $36.5 | | Variable lease cost | $2.0 | $2.0 | $4.0 | $4.0 | | Sublease income | $(25.4) | $(26.6) | $(49.9) | $(53.8) | | Total Lease income (cost) | $(1.5) | $(4.9) | $(2.6) | $(10.5) | - Total lease income (net of costs) decreased from **$(4.9) million** to **$(1.5) million** for the three months ended June 30, 2025, and from **$(10.5) million** to **$(2.6) million** for the six months ended June 30, 2025, primarily due to decreased sublease income and increased operating lease costs[54](index=54&type=chunk) [7. Long-Term Debt](index=18&type=section&id=7.%20Long-Term%20Debt) This section details the Company's long-term debt structure, including fixed-rate senior secured notes and variable funding notes, and recent refinancing activities Long-Term Debt Component (in millions) | Long-Term Debt Component (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :------------ | :---------------- | | Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II | $— | $594.0 | | Series 2022-1 Variable Funding Senior Notes, Class A-1 | $— | $100.0 | | Series 2023-1 7.824% Fixed Rate Senior Secured Notes, Class A-2 | $500.0 | $500.0 | | Series 2025-1 6.720% Fixed Rate Senior Secured Notes, Class A-2 | $600.0 | $— | | Series 2025-1 Variable Funding Senior Notes, Class A-1 | $100.0 | $— | | Unamortized debt issuance costs | $(13.0) | $(7.4) | | Long-term debt, net of debt issuance costs | $1,187.0 | $1,186.6 | | Less: current portion of long-term debt | $(100.0) | $(100.0) | | Total Long-term debt | $1,087.0 | $1,086.6 | - In June 2025, the Company refinanced its debt, issuing **$600 million** of Series 2025-1 6.720% Fixed Rate Senior Secured Notes and establishing a new **$325 million** revolving Credit Facility (2025 Class A-1 Notes). The proceeds were used to repay the **$594.0 million** outstanding balance of the 2019 Class A-2-II Notes. The Company's leverage ratio was approximately **4.25x** as of June 30, 2025, suspending quarterly principal payments on Class A-2 Notes[62](index=62&type=chunk)[61](index=61&type=chunk)[68](index=68&type=chunk)[72](index=72&type=chunk) - The Company recognized a **$0.9 million** loss on extinguishment of debt related to the write-off of unamortized debt issuance costs from the repaid 2019 Class A-2-II Notes[87](index=87&type=chunk)[88](index=88&type=chunk) [8. Stockholders' Deficit](index=22&type=section&id=8.%20Stockholders'%20Deficit) This section details changes in stockholders' deficit, including dividends declared and paid, and share repurchase activities Dividend Metric | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Dividends declared per common share | $0.51 | $0.51 | $1.02 | $1.02 | | Dividends paid per common share | $0.51 | $0.51 | $1.02 | $1.02 | | Total dividends paid (in millions) | N/A | N/A | $15.8 | $15.7 | - The Board of Directors declared a cash dividend of **$0.51 per share** for both the first and second quarters of 2025. Under the 2022 Repurchase Program, the Company repurchased **309,778 shares** of common stock for **$7.6 million** during the six months ended June 30, 2025, with **$125.7 million** remaining authorization[94](index=94&type=chunk)[97](index=97&type=chunk) [9. Income Taxes](index=22&type=section&id=9.%20Income%20Taxes) This section provides details on the Company's effective tax rate and unrecognized tax benefits - The effective tax rate for the six months ended June 30, 2025, was **30.6%**, higher than the **26.4%** for the same period in 2024, primarily due to a lower tax deduction related to stock-based compensation[99](index=99&type=chunk) - The total gross unrecognized tax benefit was **$2.8 million** as of June 30, 2025, with an estimated decrease of **$0.1 million** over the next 12 months due to settlements and statute of limitations expirations[100](index=100&type=chunk) [10. Stock-Based Compensation](index=23&type=section&id=10.%20Stock-Based%20Compensation) This section details the Company's stock-based compensation expense and unrecognized compensation for various awards Stock-Based Compensation Expense (in millions) | Stock-Based Compensation Expense (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Equity classified awards expense | $3.3 | $3.9 | $6.7 | $8.8 | | Liability classified awards expense | $(0.5) | $(0.6) | $(0.2) | $0.1 | | Total stock-based compensation expense | $2.8 | $3.3 | $6.5 | $8.9 | - Total stock-based compensation expense decreased for both the three and six months ended June 30, 2025, compared to the prior year periods. Unrecognized compensation expense totaled **$20.9 million** for restricted stock/units and **$1.6 million** for stock options as of June 30, 2025[105](index=105&type=chunk) [11. Net Income per Share](index=25&type=section&id=11.%20Net%20Income%20per%20Share) This section presents the basic and diluted net income per common share and related weighted average outstanding shares Net Income per Share (in thousands, except per share data) | Net Income per Share (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income available to common stockholders - basic | $13,213 | $22,479 | $21,092 | $39,449 | | Weighted average outstanding shares of common stock - basic | 14,879 | 14,943 | 14,907 | 14,962 | | Basic EPS | $0.89 | $1.50 | $1.41 | $2.64 | | Diluted EPS | $0.89 | $1.50 | $1.41 | $2.64 | - Basic and diluted net income per common share decreased significantly for both the three-month (**$0.89 vs. $1.50**) and six-month (**$1.41 vs. $2.64**) periods ended June 30, 2025, compared to the prior year[113](index=113&type=chunk) [12. Segments](index=25&type=section&id=12.%20Segments) This section outlines the Company's four reportable segments and their respective operating performance - The Company operates with four reportable segments: franchise operations (Applebee's, IHOP, Fuzzy's), company-owned restaurant operations, rental operations, and financing operations. The CODM uses revenue and operating profit to assess segment performance and allocate resources[116](index=116&type=chunk) Segment Operating Profit (in millions) | Segment Operating Profit (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Franchise | $55.3 | $60.3 | $108.1 | $117.7 | | Company Restaurants | $(4.6) | $0.0 | $(6.4) | $0.0 | | Rental | $6.4 | $7.4 | $11.8 | $14.9 | | Financing | $0.2 | $0.4 | $0.5 | $0.8 | | Total Segment Operating Profit | $57.3 | $68.0 | $114.1 | $133.4 | - Total segment operating profit decreased by **$10.7 million (15.7%)** for the three months and **$19.3 million (14.5%)** for the six months ended June 30, 2025, primarily due to declines in franchise, company restaurant, and rental operations[120](index=120&type=chunk)[123](index=123&type=chunk)[126](index=126&type=chunk)[128](index=128&type=chunk) [13. Closure and Impairment Charges](index=29&type=section&id=13.%20Closure%20and%20Impairment%20Charges) This section details the charges incurred from restaurant closures and asset impairments, including strategic realignment activities Closure and Impairment Charges (in millions) | Charge Type (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Closure charges | $1.0 | $0.4 | $3.8 | $1.1 | | Other asset impairment charges | $0.2 | $— | $3.2 | $— | | Total | $1.2 | $0.4 | $7.0 | $1.1 | - Total closure and impairment charges significantly increased to **$7.0 million** for the six months ended June 30, 2025, from **$1.1 million** in the prior year, primarily due to the acquisition and closure of certain IHOP restaurants in the Cincinnati market as part of a strategic realignment[130](index=130&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) [14. Fair Value Measurements](index=30&type=section&id=14.%20Fair%20Value%20Measurements) This section discusses the fair value of the Company's financial instruments, particularly long-term debt, and the inputs used for their measurement - The Company does not have material financial assets or liabilities measured at fair value on a recurring basis, nor material derivative financial instruments. The fair values of long-term debt (excluding the Credit Facility) were **$1,104.9 million** at June 30, 2025, and **$1,095.5 million** at December 31, 2024, determined using Level 2 inputs[134](index=134&type=chunk)[135](index=135&type=chunk) [15. Commitments and Contingencies](index=30&type=section&id=15.%20Commitments%20and%20Contingencies) This section outlines the Company's involvement in legal proceedings and potential liabilities from lease guarantees related to refranchised restaurants - The Company is involved in various lawsuits and administrative proceedings in the ordinary course of business. In connection with refranchising Applebee's restaurants, the Company has guaranteed or has potential continuing liability for lease payments totaling **$331.8 million** as of June 30, 2025, with a potential liability of **$85.1 million** excluding unexercised option periods[136](index=136&type=chunk)[137](index=137&type=chunk) [16. Cash, Cash Equivalents and Restricted Cash](index=30&type=section&id=16.%20Cash,%20Cash%20Equivalents%20and%20Restricted%20Cash) This section provides a breakdown of the Company's cash, cash equivalents, and restricted cash balances, including their primary components Cash Component (in millions) | Cash Component (in millions) | June 30, 2025 | December 31, 2024 | | :--------------------------- | :------------ | :---------------- | | Total cash and cash equivalents | $194.2 | $186.7 | | Total current restricted cash | $47.0 | $42.4 | | Non-current restricted cash | $22.0 | $19.5 | | Total cash, cash equivalents and restricted cash | $263.2 | $248.6 | - Total cash, cash equivalents, and restricted cash increased from **$248.6 million** at December 31, 2024, to **$263.2 million** at June 30, 2025. Current restricted cash primarily consists of securitized debt reserves and Applebee's advertising funds, while non-current restricted cash represents interest reserves for securitized debt[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) [17. Business Acquisition](index=31&type=section&id=17.%20Business%20Acquisition) This section details the Company's recent acquisitions of IHOP and Applebee's restaurants, including the resulting bargain purchase gain and goodwill - In March 2025, the Company acquired **10 IHOP restaurants** for **$0.2 million**, resulting in a **$0.2 million** bargain purchase gain. In May 2025, it acquired **12 Applebee's restaurants** for **$1.3 million**, resulting in **$1.6 million** in goodwill. These acquisitions are part of a strategy to invest in the system, improve operations, and create a blueprint for franchisee success[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[147](index=147&type=chunk) [18. Subsequent Event](index=32&type=section&id=18.%20Subsequent%20Event) This section reports on the enactment of the One Big Beautiful Bill Act (OBBBA) subsequent to the quarter end and its potential impact - Subsequent to the quarter end, on July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted, amending U.S. tax law. The Company is currently evaluating the impact of OBBBA on its consolidated financial statements[150](index=150&type=chunk) [Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202—Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section offers management's analysis of the Company's financial condition and operational results, covering key performance indicators, consolidated revenues, gross profit, segment performance, and liquidity [Overview](index=33&type=section&id=Overview) This section introduces Dine Brands Global as a major full-service restaurant company, detailing its brands and reportable segments - Dine Brands Global operates as one of the largest full-service restaurant companies globally, owning and franchising Applebee's, IHOP, and Fuzzy's Taco Shop concepts. The Company has four reportable segments: franchise operations, rental operations, financing operations, and company-owned restaurant operations[153](index=153&type=chunk) [Key Financial Results](index=33&type=section&id=Key%20Financial%20Results) This section highlights the Company's core financial outcomes, including income before taxes, net income, effective tax rate, and diluted earnings per share Key Financial Results (in millions, except per share data) | Metric (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance (Unfavorable) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance (Unfavorable) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :--------------------- | :----------------------------- | :----------------------------- | :--------------------- | | Income before income taxes | $18.9 | $31.2 | $(12.3) | $31.7 | $55.3 | $(23.5) | | Net income | $13.8 | $23.2 | $(9.4) | $22.0 | $40.7 | $(18.6) | | Effective tax rate | 27.0% | 25.8% | (1.3)% | 30.6% | 26.4% | (4.2)% | | Net income per diluted share | $0.89 | $1.50 | $(0.61) | $1.41 | $2.64 | $(1.23) | - Income before income taxes decreased by **$12.3 million** for the three months and **$23.5 million** for the six months ended June 30, 2025, primarily due to decreased gross profit, increased G&A expenses, and a loss on extinguishment of debt. The effective tax rate increased due to a lower tax deduction related to stock-based compensation[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) [Key Performance Indicators](index=34&type=section&id=Key%20Performance%20Indicators) This section presents crucial metrics such as system-wide sales, same-restaurant sales, and restaurant development for each brand - Key performance indicators include system-wide sales percentage change, domestic system-wide same-restaurant sales, net franchise restaurant development, and change in effective restaurants, which directly impact royalty and advertising revenues[160](index=160&type=chunk) Key Performance Indicators by Brand | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------------ | :------------------------------- | :----------------------------- | | **Applebee's** | | | | Sales percentage increase (decrease) in reported retail sales | 2.8% | (0.5)% | | % Increase (decrease) in domestic system wide same-restaurant sales | 4.9% | 1.3% | | Net franchise restaurant reduction | (21) | (41) | | Net decrease in total effective restaurants | (50) | (44) | | **IHOP** | | | | Sales percentage increase (decrease) in reported retail sales | (2.3)% | (2.6)% | | % Increase (decrease) in domestic system wide same-restaurant sales | (2.3)% | (2.5)% | | Net franchise restaurant reduction | (18) | (28) | | Net decrease in total effective restaurants | (11) | (6) | | **Fuzzy's** | | | | Sales percentage increase (decrease) in reported retail sales | (17.0)% | (16.9)% | | % Increase (decrease) in domestic system wide same-restaurant sales | (11.8)% | (12.0)% | | Net franchise restaurant reduction | (1) | (4) | | Net decrease in total effective restaurants | (14) | (14) | - Applebee's domestic same-restaurant sales increased by **4.9%** for the three months and **1.3%** for the six months ended June 30, 2025, outperforming the casual dining segment for the three-month period. IHOP's domestic same-restaurant sales decreased by **2.3%** and **2.5%** for the respective periods, underperforming the family dining segment. Fuzzy's domestic same-restaurant sales significantly decreased by **11.8%** and **12.0%** for the respective periods[164](index=164&type=chunk)[165](index=165&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[171](index=171&type=chunk) [CONSOLIDATED RESULTS OF OPERATIONS](index=40&type=section&id=CONSOLIDATED%20RESULTS%20OF%20OPERATIONS) This section provides a detailed analysis of the Company's consolidated financial performance, including revenue, gross profit, and segment-specific results [Events Impacting Comparability of Financial Information](index=40&type=section&id=Events%20Impacting%20Comparability%20of%20Financial%20Information) This section highlights the impact of recent restaurant acquisitions on the comparability of the Company's financial results - The Company's financial results for the three and six months ended June 30, 2025, were impacted by the acquisition and operation of **47 Applebee's restaurants** in November 2024, **10 IHOP restaurants** in March 2025, and **12 Applebee's restaurants** in May 2025, which are now reported as company-owned[182](index=182&type=chunk) [Financial Results](index=41&type=section&id=Financial%20Results) This section presents a breakdown of total revenue by operating segment and analyzes the changes year-over-year Revenue (in millions) | Revenue (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance (Unfavorable) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance (Unfavorable) | | :-------------------- | :------------------------------- | :------------------------------- | :--------------------- | :----------------------------- | :----------------------------- | :--------------------- | | Franchise operations | $174.7 | $176.5 | $(1.8) | $340.9 | $352.4 | $(11.5) | | Rental operations | $27.5 | $29.0 | $(1.5) | $54.2 | $58.5 | $(4.3) | | Company restaurant operations | $28.2 | $0.3 | $27.9 | $49.8 | $0.6 | $49.2 | | Financing operations | $0.3 | $0.5 | $(0.2) | $0.6 | $1.0 | $(0.4) | | Total revenue | $230.8 | $206.3 | $24.5 | $445.6 | $412.5 | $33.1 | - Total revenue increased by **$24.5 million (11.9%)** for the three months and **$33.1 million (8.0%)** for the six months ended June 30, 2025, primarily due to the newly acquired company-owned restaurants, partially offset by decreases in franchise and rental operations revenue[185](index=185&type=chunk)[187](index=187&type=chunk) [Gross Profit](index=41&type=section&id=Gross%20Profit) This section analyzes the Company's gross profit performance across its operating segments and the factors influencing changes Gross Profit (in millions) | Gross Profit (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance (Unfavorable) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance (Unfavorable) | | :------------------------- | :------------------------------- | :------------------------------- | :--------------------- | :----------------------------- | :----------------------------- | :--------------------- | | Franchise operations | $88.3 | $91.5 | $(3.2) | $173.3 | $180.9 | $(7.6) | | Rental operations | $6.4 | $7.4 | $(1.0) | $11.8 | $15.0 | $(3.2) | | Company restaurant operations | $(2.7) | $0.0 | $(2.7) | $(3.1) | $0.0 | $(3.1) | | Financing operations | $0.2 | $0.4 | $(0.2) | $0.5 | $0.8 | $(0.3) | | Total gross profit | $92.2 | $99.3 | $(7.1) | $182.5 | $196.7 | $(14.2) | - Total gross profit decreased by **$7.1 million (7.1%)** for the three months and **$14.2 million (7.2%)** for the six months ended June 30, 2025, primarily due to decreased gross profit from franchise, rental, and company restaurant operations. Company restaurant gross profit turned negative due to investments in newly acquired restaurants[188](index=188&type=chunk)[189](index=189&type=chunk) [Franchise Operations](index=42&type=section&id=Franchise%20Operations) This section details the performance of the Company's franchise segment, including effective restaurant counts, revenues, and gross profit by brand Franchise Metric (in millions, except restaurants) | Franchise Metric (in millions, except restaurants) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance (Unfavorable) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance (Unfavorable) | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :--------------------- | :----------------------------- | :----------------------------- | :--------------------- | | **Effective Franchise Restaurants:** | | | | | | | | Applebee's | 1,525 | 1,627 | (102) | 1,537 | 1,631 | (94) | | IHOP | 1,781 | 1,802 | (21) | 1,789 | 1,801 | (12) | | Fuzzy's | 110 | 124 | (14) | 112 | 126 | (14) | | **Franchise Revenues:** | | | | | | | | Applebee's franchise fees | $45.7 | $43.0 | $2.7 | $86.7 | $86.4 | $0.3 | | IHOP franchise fees | $52.6 | $55.3 | $(2.7) | $105.1 | $109.7 | $(4.6) | | Fuzzy's franchise fees | $2.9 | $3.6 | $(0.7) | $5.2 | $6.5 | $(1.3) | | **Franchise Gross Profit:** | | | | | | | | Applebee's | $41.6 | $43.7 | $(2.1) | $80.7 | $86.4 | $(5.7) | | IHOP | $44.2 | $46.0 | $(1.8) | $88.0 | $91.0 | $(3.0) | | Fuzzy's | $2.6 | $1.9 | $0.7 | $4.6 | $3.5 | $1.1 | - Applebee's franchise fee revenue increased due to higher domestic same-restaurant sales and termination fees, despite a decrease in effective franchise restaurants. IHOP and Fuzzy's franchise fee revenues decreased due to lower domestic same-restaurant sales and fewer effective franchise restaurants. Applebee's franchise expenses increased due to higher bad debt expense and refranchising costs, while IHOP and Fuzzy's expenses decreased due to lower advertising contributions and bad debt[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) [Advertising Revenues and Expenses](index=43&type=section&id=Advertising%20Revenues%20and%20Expenses) This section analyzes the trends in advertising revenues and expenses, highlighting the impact of restaurant counts and same-restaurant sales Advertising (in millions) | Advertising (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Increase (Decrease) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Increase (Decrease) | | :------------------------ | :------------------------------- | :------------------------------- | :------------------ | :----------------------------- | :----------------------------- | :------------------ | | Applebee's | $44.2 | $44.3 | $(0.1) | $85.9 | $89.5 | $(3.6) | | IHOP | $28.5 | $29.2 | $(0.7) | $56.5 | $58.3 | $(1.8) | | Fuzzy's | $0.8 | $1.0 | $(0.2) | $1.6 | $2.0 | $(0.4) | | Total | $73.5 | $74.5 | $(1.0) | $144.0 | $149.8 | $(5.8) | - Total advertising revenues and expenses decreased for both the three and six months ended June 30, 2025, primarily due to fewer effective franchise restaurants (partially offset by company restaurant acquisitions) and decreases in IHOP and Fuzzy's domestic franchise same-restaurant sales, despite an increase in Applebee's[201](index=201&type=chunk) [Rental Operations](index=43&type=section&id=Rental%20Operations) This section details the revenues, expenses, and gross profit from the Company's rental operations, including factors affecting performance Rental Operations (in millions) | Rental Operations (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance (Unfavorable) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance (Unfavorable) | | :------------------------------ | :------------------------------- | :------------------------------- | :--------------------- | :----------------------------- | :----------------------------- | :--------------------- | | Rental revenues | $27.5 | $29.0 | $(1.5) | $54.2 | $58.6 | $(4.4) | | Rental expenses | $21.1 | $21.7 | $0.5 | $42.4 | $43.6 | $1.2 | | Rental operations gross profit | $6.4 | $7.4 | $(1.0) | $11.8 | $15.0 | $(3.2) | - Rental operations gross profit decreased by **$1.0 million** for the three months and **$3.2 million** for the six months ended June 30, 2025, primarily due to operating lease terminations and a decrease in percentage rent from lower system sales[204](index=204&type=chunk)[205](index=205&type=chunk) [Company Restaurant and Financing Operations](index=44&type=section&id=Company%20Restaurant%20and%20Financing%20Operations) This section analyzes the performance of company-owned restaurant operations and financing operations, including revenues, expenses, and gross profit Company Restaurant and Financing Operations (in millions) | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance (Unfavorable) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance (Unfavorable) | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------------------- | :----------------------------- | :----------------------------- | :--------------------- | | **Company Restaurant Operations:** | | | | | | | | Company restaurant sales | $28.2 | $0.3 | $27.9 | $49.8 | $0.6 | $49.2 | | Company restaurant expenses | $30.9 | $0.3 | $(30.6) | $52.9 | $0.6 | $(52.3) | | Total company restaurants operations | $(2.7) | $0.0 | $(2.7) | $(3.1) | $0.0 | $(3.1) | | **Financing Operations:** | | | | | | | | Financing revenues | $0.3 | $0.5 | $(0.2) | $0.6 | $1.0 | $(0.4) | | Financing expenses | $0.1 | $0.1 | $0.0 | $0.1 | $0.2 | $0.1 | | Total financing operations | $0.2 | $0.4 | $(0.2) | $0.5 | $0.8 | $(0.3) | - Company restaurant operations generated negative gross profit due to expenses associated with newly acquired Applebee's and IHOP restaurants. Financing revenues and gross profit declined due to a progressive decrease in interest income as note balances are repaid[206](index=206&type=chunk)[207](index=207&type=chunk) [G&A Expenses](index=44&type=section&id=G%26A%20Expenses) This section details the changes in general and administrative expenses, identifying key drivers such as compensation and professional fees G&A Expenses (in millions) | G&A Expenses (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance (Unfavorable) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance (Unfavorable) | | :------------------------- | :------------------------------- | :------------------------------- | :--------------------- | :----------------------------- | :----------------------------- | :--------------------- | | Total G&A expenses | $50.8 | $46.9 | $(3.9) | $102.1 | $99.0 | $(3.1) | - General and administrative (G&A) expenses increased by **$3.9 million (8.3%)** for the three months and **$3.1 million (3.1%)** for the six months ended June 30, 2025. This increase was primarily driven by higher compensation-related expenses, professional service fees, and costs associated with company restaurant operations and dual brand/remodel initiatives[208](index=208&type=chunk)[209](index=209&type=chunk) [Other Income and Expense Items](index=44&type=section&id=Other%20Income%20and%20Expense%20Items) This section covers various non-operating income and expense items, including interest, debt extinguishment losses, and impairment charges Other Items (in millions) | Other Items (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance (Unfavorable) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance (Unfavorable) | | :------------------------ | :------------------------------- | :------------------------------- | :--------------------- | :----------------------------- | :----------------------------- | :--------------------- | | Interest expense, net | $17.8 | $17.9 | $0.1 | $35.5 | $35.9 | $0.4 | | Loss on extinguishment of debt | $0.9 | $— | $(0.9) | $0.9 | $— | $(0.9) | | Closure and impairment charges | $1.2 | $0.4 | $(0.7) | $7.0 | $1.1 | $(5.9) | | Amortization of intangible assets | $2.7 | $2.7 | $0.0 | $5.4 | $5.4 | $0.0 | | Loss (gain) on disposition of assets | $0.0 | $0.2 | $0.2 | $(0.1) | $(0.1) | $0.0 | | Total other income and expenses | $22.5 | $21.2 | $(1.3) | $48.7 | $42.3 | $(6.4) | - Interest expense, net, slightly decreased due to lower interest rates on the Credit Facility. A **$0.9 million** loss on extinguishment of debt was recognized from the repayment of the 2019 Class A-2-II Notes. Closure and impairment charges significantly increased due to the strategic realignment of the IHOP Cincinnati market[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) [Income Taxes](index=45&type=section&id=Income%20Taxes) This section analyzes the Company's income tax provision and effective tax rate, noting factors influencing changes Income Taxes (in millions) | Income Taxes (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Variance (Unfavorable) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance (Unfavorable) | | :------------------------- | :------------------------------- | :------------------------------- | :--------------------- | :----------------------------- | :----------------------------- | :--------------------- | | Income before income taxes | $18.9 | $31.2 | $(12.3) | $31.7 | $55.3 | $(23.5) | | Income tax provision | $5.1 | $8.0 | $2.9 | $9.7 | $14.6 | $4.9 | | Effective tax rate | 27.0% | 25.8% | (1.3)% | 30.6% | 26.4% | (4.2)% | - The effective tax rate for the three and six months ended June 30, 2025, was higher than the prior comparable periods, primarily due to a lower tax deduction related to stock-based compensation[215](index=215&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) This section evaluates the Company's ability to generate and manage cash, detailing its debt instruments, covenants, and capital allocation strategies [Instruments](index=45&type=section&id=Instruments) This section describes the Company's long-term debt instruments, including various series of fixed-rate notes and its revolving credit facility - The Company's long-term debt includes **$500 million** of Series 2023-1 7.824% Fixed Rate Senior Secured Notes, **$600 million** of Series 2025-1 6.720% Fixed Rate Senior Secured Notes, and a **$325 million** revolving Credit Facility (2025-1 Variable Funding Senior Notes, Class A-1)[218](index=218&type=chunk)[219](index=219&type=chunk) [Maturity](index=45&type=section&id=Maturity) This section outlines the legal final maturity and anticipated repayment dates for the Company's various debt series and credit facility - The 2023 Class A-2 Notes have a legal final maturity in March 2053, with an anticipated repayment date in June 2029. The 2025 Class A-2 Notes have a legal final maturity in June 2055, with an anticipated repayment date in June 2030. The Credit Facility has a renewal date in June 2030, with options for two additional one-year extensions[220](index=220&type=chunk)[221](index=221&type=chunk) [Payment of Principal and Interest](index=46&type=section&id=Payment%20of%20Principal%20and%20Interest) This section details the requirements for principal and interest payments on Class A-2 Notes and the conditions for their suspension - Quarterly principal and interest payments are required on Class A-2 Notes, but principal payments can be suspended if the leverage ratio is less than or equal to **5.25x**. As of June 30, 2025, the Company's leverage ratio was approximately **4.25x**, so principal payments are not currently required[222](index=222&type=chunk) - The Board authorized a debt repurchase program of up to **$100 million** in February 2023 to reduce future cash interest payments and amounts due at maturity[224](index=224&type=chunk) [Make-whole Premiums](index=46&type=section&id=Make-whole%20Premiums) This section explains the make-whole premiums associated with voluntary or mandatory prepayments of the Company's debt instruments - Voluntary prepayment of the 2023 Class A-2 Notes would incur a make-whole premium of approximately **$23.9 million** as of June 30, 2025. For the 2025 Class A-2 Notes, this premium was approximately **$42.4 million**. Mandatory prepayments due to rapid amortization events or asset dispositions would also trigger make-whole premiums, which are considered immaterial derivatives[225](index=225&type=chunk) [Covenants and Restrictions](index=46&type=section&id=Covenants%20and%20Restrictions) This section outlines the customary covenants and restrictions on the Company's long-term debt, including the Debt Service Coverage Ratio (DSCR) thresholds - The long-term debt is subject to customary covenants, including maintaining a Debt Service Coverage Ratio (DSCR). A DSCR below certain thresholds (e.g., **1.75x, 1.20x, 1.10x**) can trigger a Cash Trapping Event, Rapid Amortization Event, Manager Termination Event, or Default Event. The Company's DSCR was approximately **3.3x** as of June 30, 2025[226](index=226&type=chunk)[227](index=227&type=chunk)[230](index=230&type=chunk) [Credit Facility](index=46&type=section&id=Credit%20Facility) This section details the Company's revolving credit facility, including its outstanding balance, available capacity, and weighted average interest rate - The **$325 million** Credit Facility allows for variable funding notes and letters of credit. As of June 30, 2025, **$100 million** was outstanding, with **$0.6 million** pledged for letters of credit, leaving **$224.4 million** available. The weighted average interest rate for the period was **6.93%**[228](index=228&type=chunk)[229](index=229&type=chunk) [Capital Allocation](index=47&type=section&id=Capital%20Allocation) This section describes the Company's capital allocation strategies, including dividend payments and share repurchase programs Dividend Metric | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Dividends declared per common share | $0.51 | $0.51 | $1.02 | $1.02 | | Dividends paid per common share | $0.51 | $0.51 | $1.02 | $1.02 | | Total dividends paid (in millions) | N/A | N/A | $15.8 | $15.7 | - The Company paid **$15.8 million** in dividends during the six months ended June 30, 2025. Under the 2022 Repurchase Program, **309,778 shares** were repurchased for **$7.6 million**, with **$125.7 million** remaining authorization[231](index=231&type=chunk)[234](index=234&type=chunk) [Cash Flows](index=47&type=section&id=Cash%20Flows) This section analyzes the Company's cash flows from operating, investing, and financing activities, highlighting key changes year-over-year Cash Flow (in millions) | Cash Flow (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance | | :---------------------------------------- | :------------------------------- | :------------------------------- | :------- | | Net cash provided by operating activities | $53.1 | $52.2 | $0.9 | | Net cash used in investing activities | $(5.2) | $(1.1) | $(4.1) | | Net cash used in financing activities | $(33.3) | $(33.3) | $0.0 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $14.6 | $17.8 | $(3.2) | - Operating cash flows increased slightly by **$0.9 million** due to favorable working capital changes. Investing activities used **$4.1 million** more cash, primarily due to increased property and equipment additions and long-term receivables. Financing activities remained consistent year-over-year[237](index=237&type=chunk)[238](index=238&type=chunk)[240](index=240&type=chunk) [Adjusted Free Cash Flow](index=48&type=section&id=Adjusted%20Free%20Cash%20Flow) This section presents the Company's adjusted free cash flow, detailing its components and the factors influencing its change Adjusted Free Cash Flow (in millions) | Adjusted Free Cash Flow (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance | | :------------------------------------ | :------------------------------- | :------------------------------- | :------- | | Cash flows provided by operating activities | $53.1 | $52.2 | $0.9 | | Principal receipts from notes and equipment contracts | $4.8 | $7.5 | $(2.7) | | Additions to property and equipment | $(9.3) | $(6.8) | $(2.5) | | Adjusted free cash flow | $48.7 | $52.9 | $(4.2) | - Adjusted free cash flow decreased by **$4.2 million** to **$48.7 million** for the six months ended June 30, 2025, primarily due to decreased principal receipts from notes and equipment contracts and increased capital expenditures, partially offset by higher operating cash flows[242](index=242&type=chunk) [Contractual Obligations and Commitments](index=48&type=section&id=Contractual%20Obligations%20and%20Commitments) This section confirms that there were no material changes to the Company's contractual obligations since the last annual report - There were no material changes to the contractual obligations as disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[243](index=243&type=chunk) [Critical Accounting Policies and Estimates](index=48&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms the consistency of the Company's critical accounting estimates with those outlined in the previous annual report - The Company's critical accounting estimates, including those for asset impairment, income taxes, and lease accounting, remained consistent with those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024, with no significant changes during the six months ended June 30, 2025[244](index=244&type=chunk)[245](index=245&type=chunk) [Item 3—Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%203—Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section confirms no material changes in market risk disclosures compared to the prior annual report - No material changes were reported regarding quantitative and qualitative disclosures about market risk compared to the previous Annual Report on Form 10-K[246](index=246&type=chunk) [Item 4—Controls and Procedures](index=49&type=section&id=Item%204—Controls%20and%20Procedures) This section outlines the Company's assessment of disclosure controls and procedures and reports on any changes in internal control over financial reporting [Disclosure Controls and Procedures](index=49&type=section&id=Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures at a reasonable assurance level - The Company's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[247](index=247&type=chunk) [Changes in Internal Control Over Financial Reporting](index=49&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports that no material changes occurred in the Company's internal control over financial reporting during the quarter - There were no material changes in the Company's internal control over financial reporting during the fiscal quarter ended June 30, 2025[248](index=248&type=chunk) PART II. OTHER INFORMATION [Item 1—Legal Proceedings](index=50&type=section&id=Item%201—Legal%20Proceedings) This section details the Company's involvement in various legal and administrative proceedings, which management deems unlikely to have a material adverse impact - The Company is subject to various legal proceedings, but management does not currently believe any will have a material adverse impact on the Company[250](index=250&type=chunk) [Item 1A—Risk Factors](index=50&type=section&id=Item%201A—Risk%20Factors) This section confirms no material changes to the risk factors previously disclosed in the Company's annual report - No material changes were reported regarding risk factors compared to the previous Annual Report on Form 10-K[251](index=251&type=chunk) [Item 2—Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202—Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's equity security purchases, including shares repurchased under public programs and those tendered for tax withholding Equity Security Purchases | Period | Total number of shares purchased (a) | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs (b) | | :------------------------------ | :----------------------------------- | :--------------------------- | :--------------------------------------------------------------------------------- | | March 31, 2025 - April 27, 2025 | 626 | $20.23 | — | | April 28, 2025 - May 25, 2025 | 790 | $23.84 | 104,810 | | May 26, 2025 - June 29, 2025 | 3,109 | $24.75 | 140,099 | | Total | 4,525 | $24.35 | 244,909 | - During the quarter ended June 30, 2025, the Company repurchased **244,909 shares** under its publicly announced program and **4,525 shares** from employees for tax withholding, with an approximate dollar value of **$125,667,000** remaining under the repurchase program[253](index=253&type=chunk) [Item 3—Defaults Upon Senior Securities](index=50&type=section&id=Item%203—Defaults%20Upon%20Senior%20Securities) This section confirms that no defaults occurred upon senior securities during the reporting period - No defaults upon senior securities were reported[254](index=254&type=chunk) [Item 4—Mine Safety Disclosures](index=50&type=section&id=Item%204—Mine%20Safety%20Disclosures) This section clarifies that mine safety disclosures are not relevant to the Company's operations - Mine safety disclosures are not applicable to the Company[255](index=255&type=chunk) [Item 5—Other Information](index=50&type=section&id=Item%205—Other%20Information) This section reports no adoption, modification, or termination of securities trading plans by directors or executive officers during the quarter - No Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during the fiscal quarter ended June 30, 2025[256](index=256&type=chunk) [Item 6—Exhibits](index=51&type=section&id=Item%206—Exhibits) This section lists all exhibits accompanying the Form 10-Q, including indentures, agreements, and certifications - The report includes exhibits such as the Second Amended and Restated Base Indenture, Series 2025-1 Supplement, Class A-1 Note Purchase Agreement, Fourth Amended and Restated Management Agreement, and certifications from the CEO and CFO[257](index=257&type=chunk) [Signatures](index=52&type=section&id=Signatures) This section contains the required signatures of the Company's CEO, CFO, and Chief Accounting Officer, certifying the report's filing - The report is signed by John W. Peyton (CEO), Vance Y. Chang (CFO), and Allison Hall (Chief Accounting Officer) on August 6, 2025[261](index=261&type=chunk)

Executive Summary & Business Update Dine Brands Global, Inc. reported positive Q2 2025 momentum for Applebee's and IHOP, strengthened its capital structure, and detailed domestic restaurant sales performance [CEO and CFO Commentary](index=1&type=section&id=CEO%20and%20CFO%20Commentary) Dine Brands Global, Inc. reported positive momentum in Q2 2025, with Applebee's benefiting from value promotions and IHOP from refreshed branding. The company also strengthened its capital structure through a successful refinancing transaction - Applebee's experienced positive momentum due to strong consumer response to value-driven promotions and continued innovation in menu and marketing[3](index=3&type=chunk) - IHOP saw growth fueled by its refreshed brand positioning and value strategy[3](index=3&type=chunk) - The Dual Brands initiative is gaining traction with franchisees, with the second domestic unit opening with strong economics[3](index=3&type=chunk) - A refinancing transaction was successfully completed, strengthening the capital structure and enhancing financial flexibility for future growth[4](index=4&type=chunk) [Domestic Restaurant Sales Performance](index=1&type=section&id=Domestic%20Restaurant%20Sales%20Performance) Applebee's reported a significant increase in domestic comparable same-restaurant sales for Q2 2025, while IHOP experienced a decline. Off-premise sales continued to be a notable component for both brands Q2 2025 Domestic Comparable Same-Restaurant Sales Performance | Brand | YoY Sales Change | Off-Premise Sales Mix | Avg. Weekly Off-Premise Sales | | :--------- | :--------------- | :-------------------- | :---------------------------- | | Applebee's | +4.9% | 22.0% | ~$12,800 | | IHOP | -2.3% | 20.0% | ~$7,600 | Financial Performance Highlights Dine Brands reported mixed financial results for Q2 and the first six months of 2025, with increased revenues from acquisitions but decreased net income and EBITDA, while maintaining a strong balance sheet [Second Quarter 2025 Summary](index=2&type=section&id=Second%20Quarter%202025%20Summary) Dine Brands reported increased total revenues for Q2 2025, primarily driven by company restaurant acquisitions. However, GAAP and Adjusted Net Income, as well as Adjusted EBITDA, decreased compared to the prior year, mainly due to lower segment profit and higher G&A expenses Q2 2025 Financial Summary (YoY Comparison) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :-------------------------------------- | :--------------------- | :--------------------- | :----------- | | Total Revenues | $230,784 | $206,267 | +11.9% | | General and Administrative Expenses | $50,769 | $46,858 | +8.3% | | GAAP Net Income Available to Stockholders | $13,213 | $22,479 | -41.2% | | GAAP EPS (Diluted) | $0.89 | $1.50 | -40.7% | | Adjusted Net Income Available to Stockholders | $17,367 | $25,575 | -32.1% | | Adjusted EPS (Diluted) | $1.17 | $1.71 | -31.6% | | Consolidated Adjusted EBITDA | $56,192 | $66,980 | -16.1% | - The increase in total revenues was primarily due to the acquisition of **59 Applebee's and 10 IHOP restaurants**[9](index=9&type=chunk) - The decrease in net income and adjusted net income was primarily due to a decrease in segment profit and an increase in G&A expenses[9](index=9&type=chunk) - Development activity resulted in **7 new restaurant openings** and **46 restaurant closures**[9](index=9&type=chunk) [First Six Months 2025 Summary](index=2&type=section&id=First%20Six%20Months%202025%20Summary) For the first six months of 2025, total revenues increased, largely due to company restaurant acquisitions. However, GAAP and Adjusted Net Income, as well as Adjusted EBITDA, declined year-over-year, primarily impacted by decreased segment profit, increased G&A, and higher closure and impairment charges. Operating cash flows saw a slight increase due to favorable working capital First Six Months 2025 Financial Summary (YoY Comparison) | Metric | 6M 2025 (in thousands) | 6M 2024 (in thousands) | Change (YoY) | | :-------------------------------------- | :--------------------- | :--------------------- | :----------- | | Total Revenues | $445,564 | $412,502 | +8.0% | | General and Administrative Expenses | $102,106 | $99,045 | +3.1% | | GAAP Net Income Available to Stockholders | $21,092 | $39,449 | -46.5% | | GAAP EPS (Diluted) | $1.41 | $2.64 | -46.6% | | Adjusted Net Income Available to Stockholders | $32,788 | $45,511 | -27.9% | | Adjusted EPS (Diluted) | $2.20 | $3.04 | -27.6% | | Consolidated Adjusted EBITDA | $110,923 | $127,790 | -13.2% | | Cash Flows from Operating Activities | $53,105 | $52,179 | +1.8% | | Adjusted Free Cash Flow | $48,668 | $52,942 | -8.1% | - The decline in GAAP and Adjusted Net Income was primarily due to a decrease in segment profit, an increase in closure and impairment charges, and higher G&A expenses[12](index=12&type=chunk) - Cash flows provided by operating activities increased due to a favorable change in working capital, primarily from the timing of income tax payments postponed due to wildfire relief[12](index=12&type=chunk) - Development activity for the first six months resulted in **16 new restaurant openings** and **85 restaurant closures**[12](index=12&type=chunk) [Key Balance Sheet Metrics](index=3&type=section&id=Key%20Balance%20Sheet%20Metrics) As of June 30, 2025, Dine Brands maintained a strong cash position and significant available borrowing capacity Key Balance Sheet Metrics (as of June 30, 2025) | Metric | Amount (in thousands) | | :------------------------------------------ | :-------------------- | | Total Cash, Cash Equivalents & Restricted Cash | $263,204 | | Unrestricted Cash | $194,201 | | Available Borrowing Capacity (2025 Variable Funding Senior Notes, Class A-1) | Over $224,000 | [GAAP Effective Tax Rate](index=4&type=section&id=GAAP%20Effective%20Tax%20Rate) The company's effective tax rate increased for the first six months of 2025 compared to the prior year, primarily due to a lower tax deduction related to stock-based compensation GAAP Effective Tax Rate (Six Months Ended June 30) | Period | Effective Tax Rate | | :----- | :----------------- | | 2025 | 30.6% | | 2024 | 26.4% | - The increase in the effective tax rate was primarily due to a lower tax deduction related to stock-based compensation, resulting from changes in the stock price[14](index=14&type=chunk) Capital Management & Shareholder Returns Dine Brands enhanced financial flexibility through a major refinancing transaction and returned capital to shareholders via stock repurchases and quarterly dividends in Q2 2025 [Refinancing Activities](index=4&type=section&id=Refinancing%20Activities) Dine Brands completed a significant refinancing transaction in June 2025, issuing new fixed-rate senior secured notes and establishing a new variable funding facility to enhance financial flexibility - On June 17, 2025, the company refinanced its Series 2019-1 notes by issuing Series 2025-1 **6.720% Fixed Rate Senior Secured Notes** with an initial aggregate principal amount of **$600 million** and an expected term of five years[15](index=15&type=chunk) - The company terminated its 2022-1 Variable Funding Senior Notes and entered into a purchase agreement for the issuance of up to **$325 million** of Series 2025-1, Class A-1 Variable Funding Senior Notes, allowing for revolving borrowings and letters of credit[16](index=16&type=chunk) [Share Repurchases and Dividends](index=4&type=section&id=Share%20Repurchases%20and%20Dividends) During the second quarter of 2025, Dine Brands returned capital to shareholders through common stock repurchases and quarterly cash dividends Q2 2025 Capital Returns to Shareholders | Activity | Amount (in millions) | | :------------------- | :------------------- | | Common Stock Repurchases | $6.0 | | Quarterly Cash Dividends | $8.0 | Financial Performance Guidance for 2025 Dine Brands updated its fiscal year 2025 guidance, reflecting increased business investment, adjusted sales outlooks for its brands, and revised financial forecasts [Updated Guidance](index=4&type=section&id=Updated%20Guidance) Dine Brands updated its fiscal year 2025 guidance, reflecting increased investment in the business. Applebee's sales outlook improved, while IHOP's was slightly adjusted. Consolidated Adjusted EBITDA guidance was lowered, and G&A expenses and capital expenditures forecasts were increased Updated Fiscal Year 2025 Guidance | Metric | Updated Guidance | Previous Guidance | | :------------------------------------------ | :------------------------- | :------------------------- | | Applebee's Domestic Comparable Same-Restaurant Sales | +1% to +3% | -2% to +1% | | IHOP Domestic Comparable Same-Restaurant Sales | -1% to +1% | -1% to +2% | | Applebee's Domestic Development (Net) | 20-35 net fewer restaurants | 20-35 net fewer restaurants | | IHOP Domestic Development (Net) | 10 net fewer to 10 net new openings | 10 net fewer to 10 net new openings | | Consolidated Adjusted EBITDA | $220M to $230M | $235M to $245M | | G&A Expenses | $205M to $210M | $200M to $205M | | Capital Expenditures | $30M to $40M | $20M to $30M | - The company is further investing in the business to accelerate development opportunities and strengthen its company-owned portfolio[18](index=18&type=chunk) [GAAP Net Income Guidance Disclaimer](index=5&type=section&id=GAAP%20Net%20Income%20Guidance%20Disclaimer) Dine Brands does not provide forward-looking guidance for GAAP net income due to the unpredictable nature of certain items that are not reflective of current operations - The company is unable to predict certain items contained in the GAAP measure, such as closure and impairment charges, loss on extinguishment of debt, and gain or loss on disposition of assets, without unreasonable efforts[20](index=20&type=chunk) Company Information & Legal Disclosures This section provides details on the Q2 2025 earnings call, an overview of Dine Brands Global, Inc., important forward-looking statement disclaimers, and definitions of non-GAAP financial measures [Earnings Conference Call Details](index=5&type=section&id=Earnings%20Conference%20Call%20Details) Dine Brands Global, Inc. will host a conference call on August 6, 2025, to discuss its Q2 2025 results, with a live webcast and replay available online - A live webcast and replay of the conference call will be available at https://investors.dinebrands.com[21](index=21&type=chunk) [About Dine Brands Global, Inc.](index=5&type=section&id=About%20Dine%20Brands%20Global%2C%20Inc.) Dine Brands Global, Inc. is a leading full-service restaurant company, operating and supporting nearly 3,500 Applebee's, IHOP, and Fuzzy's Taco Shop restaurants across 19 international markets as of June 30, 2025 - Dine Brands Global, Inc. is the parent company of Applebee's Neighborhood Grill + Bar®, IHOP®, and Fuzzy's Taco Shop® restaurants[22](index=22&type=chunk) - As of June 30, 2025, the three brands comprised close to **3,500 restaurants** across **19 international markets**[22](index=22&type=chunk) - Dine Brands is one of the largest full-service restaurant companies globally and expanded into the Fast Casual segment in 2022[22](index=22&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to various known and unknown risks and uncertainties that could cause actual results to differ materially. These factors include general economic conditions, indebtedness, dependence on IT, franchisee health, industry risks, and regulatory changes - Statements in the press release may constitute 'forward-looking statements' and involve known and unknown risks, uncertainties, and other factors[23](index=23&type=chunk) - Key risk factors include general economic conditions (e.g., inflation), indebtedness, compliance with securitized debt, ability to refinance, dependence on information technology, potential cyber incidents, and the financial health of franchisees[23](index=23&type=chunk)[26](index=26&type=chunk) - The company does not intend to, nor does it assume any obligation to, update or supplement any forward-looking statements after the date of the press release[26](index=26&type=chunk) [Non-GAAP Financial Measures Definitions](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20Definitions) This section defines the non-GAAP financial measures used by Dine Brands, including 'adjusted net income available to common stockholders,' 'adjusted earnings per diluted share (Adjusted EPS),' 'Adjusted EBITDA,' and 'Adjusted free cash flow,' explaining their calculation and management's rationale for their use - Adjusted EPS is calculated by deducting specific non-operating items from net income available to common stockholders[27](index=27&type=chunk) - Adjusted EBITDA is computed by adjusting net income for interest expense, income tax, depreciation and amortization, non-cash stock-based compensation, closure and impairment charges, and other non-operating items[27](index=27&type=chunk) - Adjusted free cash flow is defined as cash provided by operating activities, plus receipts from notes and equipment contracts receivable, less capital expenditures[27](index=27&type=chunk) - Management uses these non-GAAP measures to evaluate business performance, make decisions, and assess cash dividends and stock repurchases, believing they provide additional meaningful information for investors[27](index=27&type=chunk)[29](index=29&type=chunk) Consolidated Financial Statements This section presents the company's detailed consolidated statements of comprehensive income, balance sheets, and cash flows for the reported periods [Consolidated Statements of Comprehensive Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) The consolidated statements of comprehensive income provide a detailed breakdown of revenues, costs, and expenses, leading to net income and comprehensive income for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Comprehensive Income (Selected Data, in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Revenues | $230,784 | $206,267 | $445,564 | $412,502 | | Total Cost of Revenues | $138,555 | $106,996 | $263,025 | $215,807 | | Gross Profit | $92,229 | $99,271 | $182,539 | $196,695 | | General and Administrative Expenses | $50,769 | $46,858 | $102,106 | $99,045 | | Income Before Income Taxes | $18,931 | $31,224 | $31,726 | $55,270 | | Net Income | $13,814 | $23,182 | $22,011 | $40,655 | | Net Income Available to Common Stockholders | $13,213 | $22,479 | $21,092 | $39,449 | | Diluted EPS | $0.89 | $1.50 | $1.41 | $2.64 | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets present the company's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' deficit Consolidated Balance Sheets (Selected Data, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Total Current Assets | $370,749 | $385,999 | | Total Assets | $1,789,947 | $1,790,584 | | Total Current Liabilities | $431,247 | $445,305 | | Long-Term Debt, Net, Less Current Maturities | $1,086,992 | $1,086,551 | | Total Liabilities | $2,002,492 | $2,006,603 | | Total Stockholders' Deficit | $(212,545) | $(216,019) | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows outline the cash generated from or used in operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows (Selected Data, in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | | Cash Flows Provided by Operating Activities | $53,105 | $52,179 | | Cash Flows Used in Investing Activities | $(5,185) | $(1,072) | | Cash Flows Used in Financing Activities | $(33,314) | $(33,308) | | Net Change in Cash, Cash Equivalents and Restricted Cash | $14,606 | $17,799 | | Cash, Cash Equivalents and Restricted Cash at End of Period | $263,204 | $218,391 | Non-GAAP Financial Reconciliations This section provides detailed reconciliations of GAAP net income to adjusted net income, cash flows to adjusted free cash flow, and net income to adjusted EBITDA for key financial periods [Reconciliation of Net Income to Adjusted Net Income](index=11&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) This section provides a reconciliation of GAAP net income available to common stockholders to adjusted net income, detailing the adjustments made for non-recurring or non-operational items for both the three and six months ended June 30, 2025 and 2024 Reconciliation of Net Income to Adjusted Net Income (Selected Data, in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income Available to Common Stockholders | $13,213 | $22,479 | $21,092 | $39,449 | | Closure and Impairment Charges | $1,155 | $442 | $7,001 | $1,076 | | Amortization of Intangible Assets | $2,694 | $2,723 | $5,410 | $5,445 | | Loss on Extinguishment of Debt | $850 | — | $850 | — | | Net Income Available to Common Stockholders, as Adjusted | $17,367 | $25,575 | $32,788 | $45,511 | | Diluted Adjusted EPS | $1.17 | $1.71 | $2.20 | $3.04 | [Reconciliation of Cash Flows to Adjusted Free Cash Flow](index=12&type=section&id=Reconciliation%20of%20Cash%20Flows%20to%20Adjusted%20Free%20Cash%20Flow) This reconciliation details the calculation of adjusted free cash flow from operating activities, a key liquidity measure used by management, for the six months ended June 30, 2025 and 2024 Reconciliation of Cash Flows to Adjusted Free Cash Flow (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | | Cash Flows Provided by Operating Activities | $53,105 | $52,179 | | Principal Receipts from Notes and Equipment Contracts | $4,826 | $7,542 | | Additions to Property and Equipment | $(9,263) | $(6,779) | | Adjusted Free Cash Flow | $48,668 | $52,942 | [Reconciliation of Net Income to Adjusted EBITDA](index=13&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) This section provides a reconciliation of GAAP net income to Adjusted EBITDA, adjusting for interest, taxes, depreciation, amortization, non-cash stock-based compensation, and other specific items for the three and six months ended June 30, 2025 and 2024 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income, as Reported | $13,814 | $23,182 | $22,011 | $40,655 | | Interest Charges | $21,300 | $21,488 | $42,513 | $42,991 | | Income Tax Provision | $5,117 | $8,042 | $9,715 | $14,615 | | Depreciation and Amortization | $10,458 | $9,654 | $20,820 | $19,395 | | Non-Cash Stock-Based Compensation | $3,251 | $3,833 | $6,616 | $8,756 | | Closure and Impairment Charges | $1,155 | $442 | $7,001 | $1,076 | | Loss on Extinguishment of Debt | $850 | — | $850 | — | | Adjusted EBITDA | $56,192 | $66,980 | $110,923 | $127,790 | Restaurant Operating Data This section provides an overview of restaurant operating data, including effective restaurant counts, same-restaurant sales, average weekly unit sales, and development activity for Applebee's, IHOP, and Fuzzy's Taco Shop [Overview of Restaurant Data](index=14&type=section&id=Overview%20of%20Restaurant%20Data) This section provides an overview of restaurant data, including the number of 'Effective Restaurants' and system-wide sales performance for Applebee's, IHOP, and Fuzzy's Taco Shop, emphasizing that franchisee sales are not attributable to the company but impact royalty revenues - 'Effective Restaurants' are the weighted average number of restaurants open, adjusted for partial period operations, and include both franchisee/area licensee and company-owned units[47](index=47&type=chunk) - 'System-wide sales' include retail sales from all Applebee's, IHOP, and Fuzzy's restaurants, both franchised and company-owned, but exclude ghost kitchens[48](index=48&type=chunk) - An increase or decrease in franchisees' reported sales directly impacts the company's royalty revenue[48](index=48&type=chunk) [Applebee's Restaurant Data](index=14&type=section&id=Applebee%27s%20Restaurant%20Data) Applebee's reported a decrease in total effective restaurants but a strong positive domestic same-restaurant sales percentage change for Q2 2025, with an increase in average weekly domestic unit sales Applebee's Restaurant Data (Selected Metrics) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Global Effective Restaurants (Total) | 1,577 | 1,627 | 1,587 | 1,631 | | Domestic Same-Restaurant Sales % Change | +4.9% | -1.8% | +1.3% | -3.2% | | Average Weekly Domestic Unit Sales (in thousands) | $58.0 | $53.9 | $56.3 | $54.3 | | Reported Sales (in millions) | $1,129.0 | $1,102.0 | $2,204.2 | $2,222.9 | - The franchise sales percentage change for 2025 was impacted by the acquisition of **47 Applebee's restaurants** in November 2024 and **12 Applebee's restaurants** in May 2025, which are now reported as company-owned[48](index=48&type=chunk) [IHOP Restaurant Data](index=14&type=section&id=IHOP%20Restaurant%20Data) IHOP experienced a slight decrease in total effective restaurants and negative domestic same-restaurant sales percentage change for Q2 and the first six months of 2025, with a modest decline in average weekly unit sales IHOP Restaurant Data (Selected Metrics) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Global Effective Restaurants (Total) | 1,791 | 1,802 | 1,795 | 1,801 | | Domestic Same-Restaurant Sales % Change (incl. area license) | -2.3% | -1.4% | -2.5% | -1.5% | | Average Weekly Unit Sales (in thousands) | $37.8 | $38.4 | $37.2 | $38.0 | | Reported Sales (in millions) | $876.4 | $897.1 | $1,731.8 | $1,778.8 | - The franchise sales percentage change for 2025 was impacted by the acquisition of **10 IHOP restaurants** in March 2025, now reported as company-owned[48](index=48&type=chunk) [Fuzzy's Taco Shop Restaurant Data](index=15&type=section&id=Fuzzy%27s%20Taco%20Shop%20Restaurant%20Data) Fuzzy's Taco Shop experienced a reduction in total effective restaurants and a significant negative domestic same-restaurant sales percentage change for both Q2 and the first six months of 2025, alongside a decrease in average weekly domestic unit sales Fuzzy's Taco Shop Restaurant Data (Selected Metrics) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Global Effective Restaurants (Total) | 111 | 125 | 113 | 127 | | Domestic Same-Restaurant Sales % Change | -11.8% | -7.5% | -12.0% | -8.6% | | Average Weekly Domestic Unit Sales (in thousands) | $30.2 | $32.2 | $28.3 | $30.4 | | Reported Sales (in millions) | $43.3 | $52.2 | $82.8 | $99.7 | [Restaurant Development Activity](index=16&type=section&id=Restaurant%20Development%20Activity) Dine Brands' restaurant development activity for the first six months of 2025 showed a net reduction in franchise restaurants across all three brands, with a notable number of closures partially offset by new openings and company acquisitions [Applebee's Development](index=16&type=section&id=Applebee%27s%20Development) Applebee's experienced a net decrease in franchise restaurants for the first six months of 2025, driven by closures and company acquisitions of franchise units Applebee's Restaurant Development Activity (6 Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------------- | :--- | :--- | | Total Applebee's Restaurants, Beginning of Period | 1,614 | 1,642 | | Franchise Restaurants Opened | 1 | 5 | | Franchise Restaurants Permanently Closed | (42) | (22) | | Franchise Restaurants Acquired by Company | (12) | — | | Total Applebee's Restaurants, End of Period | 1,573 | 1,625 | [IHOP Development](index=17&type=section&id=IHOP%20Development) IHOP also saw a net decrease in franchise/area license restaurants for the first six months of 2025, with closures outweighing new openings and company acquisitions IHOP Restaurant Development Activity (6 Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------------- | :--- | :--- | | Total IHOP Restaurants, Beginning of Period | 1,824 | 1,814 | | Franchise/Area License Restaurants Opened | 15 | 20 | | Franchise/Area License Restaurants Permanently Closed | (43) | (23) | | Franchise Restaurants Acquired by Company | (10) | — | | Total IHOP Restaurants, End of Period | 1,796 | 1,811 | [Fuzzy's Development](index=17&type=section&id=Fuzzy%27s%20Development) Fuzzy's Taco Shop experienced a net reduction in franchise restaurants for the first six months of 2025, primarily due to closures Fuzzy's Taco Shop Restaurant Development Activity (6 Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------------- | :--- | :--- | | Total Fuzzy's Restaurants, Beginning of Period | 117 | 132 | | Franchise Restaurants Opened | 3 | — | | Franchise Restaurants Permanently Closed | (7) | (7) | | Total Fuzzy's Restaurants, End of Period | 113 | 125 | [Dual-Branded Restaurants and Ghost Kitchens](index=18&type=section&id=Dual-Branded%20Restaurants%20and%20Ghost%20Kitchens) The restaurant counts include dual-branded Applebee's and IHOP restaurants, which are counted separately for each brand, but exclude ghost kitchens - As of June 30, 2025, there were **20 dual-branded international** and **one dual-branded domestic** Applebee's and IHOP restaurants[54](index=54&type=chunk) - Dual-branded restaurants operate two concepts in one location under separate franchise agreements and are counted in each brand's totals[54](index=54&type=chunk) - Ghost kitchens, defined as small kitchens with no store-front presence used for off-premise orders, are not included in the restaurant counts or activity[54](index=54&type=chunk)

Company Overview - Dine Brands (DIN) is anticipated to report a year-over-year decline in earnings of 12.9%, with expected earnings of $1.49 per share for the quarter ended June 2025 [3] - Revenue is projected to increase by 7.7% to $222.12 million compared to the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for release on August 6, and the actual results will significantly influence the stock price [2] - A positive earnings surprise could lead to a stock price increase, while a miss may result in a decline [2] Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from covering analysts [4] - The Most Accurate Estimate for Dine Brands is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -3.36%, suggesting a bearish sentiment among analysts [12] Historical Performance - In the last reported quarter, Dine Brands had an earnings surprise of -12.71%, with actual earnings of $1.03 per share compared to an expected $1.18 [13] - Over the past four quarters, the company has beaten consensus EPS estimates two times [14] Industry Context - In the Zacks Retail - Restaurants industry, The ONE Group Hospitality, Inc. is expected to post earnings of $0.08 per share, with a revenue increase of 21.4% to $209.33 million [19] - The ONE Group's consensus EPS estimate has been revised down by 666.7% over the last 30 days, resulting in an Earnings ESP of -28% [19][20]

Group 1 - Goulart Restaurant Stocks has released new traffic data in preparation for Q2 FY 2025, indicating a proactive approach rather than a reactive one post-earnings [1] - The article emphasizes the importance of fresh traffic data for understanding market trends and potential investment opportunities in the restaurant sector [1]

Core Insights - The article discusses the investment strategies and achievements of Paul Franke, a seasoned investor with 39 years of trading experience, highlighting his unique stock selection style and methodologies [1]. Investment Strategies - Paul Franke employs a contrarian stock selection style, utilizing daily algorithm analysis of fundamental and technical data to identify investment opportunities [1]. - His system, named "Victory Formation," focuses on supply/demand imbalances indicated by specific stock price and volume movements [1]. - Franke recommends a diversified approach, suggesting investors hold at least 50 well-positioned stocks to achieve regular outperformance in the stock market [1]. Stock Selection Techniques - The "Bottom Fishing Club" articles target deep value candidates or stocks showing significant technical momentum reversals [1]. - The "Volume Breakout Report" articles analyze positive trend changes supported by strong price and volume trading actions [1].

Core Viewpoint - The restaurant sector is poised for disruption through the increasing application of artificial intelligence, with Dine Brands Global Inc actively integrating AI technology to enhance customer experience and operational efficiency [1][5]. Group 1: AI Implementation - Dine Brands is set to introduce an AI-powered "personalization engine" to assist with menu recommendations and increase sales, utilizing Amazon's Q generative AI assistant [2][5]. - The personalization engine leverages customer ordering history from the loyalty program to suggest items, while also providing recommendations based on popular items for new customers [3][6]. - AI technology will also be employed to streamline operations, such as detecting when tables need clearing and assisting managers with staffing decisions [4][6]. Group 2: Industry Context - Dine Brands joins other restaurant companies, including McDonald's and Yum Brands, in adopting AI technology for various operational enhancements, particularly in drive-thru services [5][6]. - The use of AI in the restaurant sector is expected to improve productivity, assist in inventory control, and ultimately reduce costs [6][7]. - The stock performance of Dine Brands shows a decline of 9.8% year-to-date in 2025, with shares closing at $27.15, within a 52-week range of $18.63 to $38.68 [7].

Core Insights - Chili's has surpassed Applebee's in U.S. systemwide sales for the first time in 2024, with sales growing from approximately $3.6 billion in 2021 to $4.6 billion in 2024, while Applebee's sales remained flat at $4.1 billion during the same period [1] - In the most recent fiscal quarters, Chili's reported a 31% increase in same-store sales, whereas Applebee's experienced a 2.2% decline, marking the eighth consecutive quarter of declines for Applebee's [2] Company Performance - Dine Brands, the parent company of Applebee's, has seen its share price decline by about 40% over the past year, with analysts suggesting that returning to positive same-store sales could significantly boost the stock [3] - Dine Brands operates as an "asset light business," primarily through franchised restaurants, which limits operational control compared to Chili's, which is mostly company-owned [4] Strategic Initiatives - Dine Brands is planning to remodel all its locations over the next three years and is incentivizing franchisees to adopt these renovations early [6] - The company is also introducing combination restaurants featuring both IHOP and Applebee's, with the first location opened in Seguin, Texas, showing promising sales growth from $2 million to $6 million annually [7][8] Market Outlook - Despite softer traffic in 2024, there is optimism about future growth and success within the Applebee's franchisee community [9]

Core Insights - Wyndham Rewards is enhancing its offerings by providing members with new dining perks and exclusive access to popular events and festivals [1][2][4] - The program aims to improve member experiences by allowing them to convert points into unique experiences through auctions and fixed-point rewards [3][6] - Wyndham Rewards has been recognized as the 1 hotel rewards program by U.S. News & World Report and USA Today, reflecting its commitment to continuous improvement [5][8] Dining and Experiences - Wyndham Rewards members will soon earn points for mobile To Go orders at over 1,500 Applebee's restaurants, with free delivery included [4][11] - The program features over 150 new experiences, including VIP tickets to sold-out events and unique activities like riding on a Zamboni during a New York Rangers game [9][10] Membership Benefits - Members earn a guaranteed 1,000 points with every qualified stay and can redeem free nights starting at just 7,500 points [10] - The program has expanded its offerings, including the introduction of a co-brand debit card and enhanced points redemption options [6]

Group 1 - The article suggests that Dine Brands (NYSE: DIN) has reached a potential bottom around the $20 mark after a six-month search for a buying opportunity [1] - The author has a strong background in restaurant stocks, with expertise in Business Administration, Accounting, and an MBA in Forensic Accounting [2] - The company focuses on analyzing various segments of the restaurant industry, including QSR, fast casual, casual dining, fine dining, and family dining, using advanced analytical models [2] Group 2 - The analysis aims to provide detailed insights and actionable strategies to help investors make informed decisions in the restaurant sector [2] - The author has previously contributed to discussions on monetary policy, financial education, and financial modeling, indicating a commitment to making financial topics accessible [2]