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Core Insights - Dine Brands (DIN) reported revenue of $214.78 million for Q1 2025, a year-over-year increase of 4.1%, but fell short of the Zacks Consensus Estimate by -0.24% [1] - The EPS for the quarter was $1.03, down from $1.33 a year ago, representing a surprise of -12.71% against the consensus estimate of $1.18 [1] Financial Performance Metrics - Dine Brands' shares returned +6.4% over the past month, underperforming the Zacks S&P 500 composite's +10.6% [3] - IHOP's domestic same-restaurant sales decreased by -2.7%, worse than the average estimate of -1.8% [4] - The total number of IHOP restaurants was 1,814, slightly below the estimated 1,822 [4] - Applebee's restaurants totaled 1,594, compared to the average estimate of 1,606 [4] - Applebee's domestic same-restaurant sales decreased by -2.2%, better than the estimated -3% [4] Revenue Breakdown - Franchise revenues were reported at $166.21 million, below the average estimate of $168.51 million, reflecting a year-over-year decline of -5.5% [4] - Rental revenues were $26.66 million, compared to the average estimate of $28.88 million, marking a -9.8% year-over-year change [4] - Financing revenues were $0.34 million, lower than the estimated $0.45 million, representing a significant -36.8% decline year-over-year [4] - Company restaurant sales reached $21.57 million, exceeding the average estimate of $17.47 million, with a remarkable year-over-year increase of +7773.4% [4] - Advertising revenue from franchise revenues was $70.49 million, slightly below the average estimate of $71.55 million, indicating a -6.3% year-over-year change [4] - Royalties, franchise fees, and other revenues totaled $95.72 million, compared to the average estimate of $97.51 million, reflecting a -4.9% year-over-year decline [4]

Financial Data and Key Metrics Changes - In Q1, EBITDA decreased to $54.7 million from $60.8 million in the same quarter last year [12] - Revenues increased by 4% to $214.8 million compared to $206.2 million in the prior year [28] - Adjusted free cash flow was $14.6 million, down from $29.7 million in the same period last year [30] - Adjusted diluted EPS for Q1 was $1.03 compared to $1.33 for the same quarter of the previous year [29] Business Line Data and Key Metrics Changes - Applebee's reported a 2.2% decline in comp sales, while IHOP posted a negative 2.7% in comp sales [12][32] - Applebee's value mix increased from 28% to 34%, and IHOP's value mix increased from 16% to 19% [9] - Off-premise comp sales at Applebee's increased by 3.7% compared to last year [12] Market Data and Key Metrics Changes - Approximately 13% of IHOP's and 10% of Applebee's annual market basket comes from international markets [10] - Applebee's commodity costs increased by 0.5%, while IHOP's commodity costs increased by 8.4% compared to the prior year [33] Company Strategy and Development Direction - The company is focusing on three key priorities: elevating guest experience, enhancing menu and value programs, and better communicating brand value [7] - The company is committed to remodeling Applebee's restaurants and has initiated a reimaging incentive program for franchisees [31][25] - The dual brand concept is being expanded, with plans to open 13 additional dual brands and complete 10 dual conversions this year [20] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer confidence has declined, affecting spending, particularly among lower-income guests [8] - Despite challenges, management expressed optimism about the positive momentum seen in sales and traffic in March and April [9][41] - The company is maintaining its full-year financial guidance at this time [35] Other Important Information - The company is actively monitoring global trade tensions and their potential impact on operations, confirming that only a small portion of their market basket is sourced internationally [10] - The company has implemented projects resulting in over $14 million of annualized savings across both systems in 2025 [35] Q&A Session Summary Question: Context on Applebee's performance in April - Management noted modest improvement in January, pressure in February, and a significant improvement in March that continued into April, driven by promotions and off-premise sales [41][42] Question: IHOP's same-store sales guidance - Management indicated that the positive trend in traffic is driven by the success of the house faves menu and ongoing marketing efforts [49][55] Question: Value proposition at both brands - Management emphasized the importance of listening to consumers and evolving the value proposition based on feedback and market conditions [60][62] Question: Franchisee sentiment and development demand - Management expects a healthy mix of dual brands and single brands, with ongoing interest from franchisees in new openings [66][68] Question: Applebee's remodel package details - The remodel package is expected to cost between $200,000 to $300,000 per location, with incentives for franchisees [71][72] Question: Average check growth expectations - Management indicated that menu pricing increases are expected to normalize in the low single-digit range moving forward [75]

Financial Data and Key Metrics Changes - In Q1 2025, EBITDA decreased to $54.7 million from $60.8 million in the same quarter last year [13] - Revenues increased by 4% to $214.8 million compared to $206.2 million in Q1 2024 [28] - Adjusted free cash flow was $14.6 million, down from $29.7 million in the prior year [30] - Adjusted diluted EPS for Q1 2025 was $1.03, compared to $1.33 in Q1 2024 [29] Business Line Data and Key Metrics Changes - Applebee's reported a 2.2% decline in comp sales, while IHOP posted a negative 2.7% in comp sales [13][32] - Off-premise comp sales at Applebee's increased by 3.7%, driven by promotions [13] - IHOP's house faves value menu contributed to traffic growth, outperforming the family dining segment [18] Market Data and Key Metrics Changes - The value mix at Applebee's increased from 28% to 34%, while IHOP's value mix rose from 16% to 19% [9] - Approximately 13% of IHOP's and 10% of Applebee's annual market basket is sourced internationally [11] Company Strategy and Development Direction - The company is focused on three key priorities: elevating guest experience, enhancing menu and value programs, and better communicating brand value [7] - The dual brand concept is being expanded, with plans for 13 additional dual brands and 10 conversions this year [21][23] - The company is committed to remodeling Applebee's restaurants and has introduced an early adopter incentive for franchisees [31][75] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer confidence has declined, affecting spending, particularly among lower-income guests [8] - Despite challenges, there was positive momentum in sales and traffic in March and April [9][94] - The company maintains its full-year financial guidance, indicating confidence in its strategic initiatives [35] Other Important Information - The company is actively monitoring global trade tensions and their potential impact on costs, with a small portion of market basket sourced internationally [10] - The company has implemented cost-saving initiatives resulting in over $14 million of annualized savings across both systems [34] Q&A Session Summary Question: Context on Applebee's performance in April - Management noted modest improvement in January, pressure in February, but a significant improvement in March that continued into April, driven by promotions and off-premise sales [41][42] Question: IHOP's same-store sales guidance - Management confirmed confidence in IHOP's guidance due to traffic momentum and successful marketing initiatives [50][56] Question: Value proposition at both brands - Management emphasized the importance of evolving the value proposition based on consumer feedback and market conditions [59][63] Question: Applebee's remodel package details - The remodel package is expected to cost between $200,000 to $300,000 per franchisee, with incentives provided for early adopters [72][75] Question: Average check growth expectations - Applebee's check increased slightly, while IHOP's check dropped due to a shift in product mix [77] Question: Operational simplification examples - Management highlighted improvements in ordering speed through technology and operational flow enhancements [81][84] Question: Future direction for Club Applebee's - The company plans to enhance Club Applebee's with more personalized marketing and exclusive offers for members [87][92]

Core Insights - Dine Brands (DIN) reported quarterly earnings of $1.03 per share, missing the Zacks Consensus Estimate of $1.18 per share, and down from $1.33 per share a year ago, representing an earnings surprise of -12.71% [1] - The company posted revenues of $214.78 million for the quarter, slightly missing the Zacks Consensus Estimate by 0.24%, and up from $206.24 million year-over-year [2] - Dine Brands shares have declined approximately 33.7% year-to-date, contrasting with the S&P 500's decline of -4.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.50 on revenues of $218.43 million, and for the current fiscal year, it is $5.06 on revenues of $858.74 million [7] - The estimate revisions trend for Dine Brands is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Retail - Restaurants industry, to which Dine Brands belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, suggesting a challenging environment for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-15283 Dine Brands Global, Inc. (Exact name of registrant as specified in its charter) Delaware 95-3038279 (State or other jurisdiction of incorp ...

First Quarter 2025 Results [Management Commentary](index=1&type=section&id=Management%20Commentary) Management acknowledges a challenging operating environment due to consumer price sensitivity but notes that the business fundamentals remain strong. They report steady improvement in sales, traffic, and development since the latter half of the quarter. The company is focused on enhancing guest experience, strengthening menus and value, and driving clearer marketing messages. The asset-light business model continues to generate solid cash flow, enabling investments and shareholder returns - The company is advancing its long-term strategy by focusing on near-term priorities: enhancing guest experience, strengthening menu and value platforms, and improving value messaging through marketing[3](index=3&type=chunk) - Despite consumer price sensitivity, the company's asset-light business model remains steady, providing solid cash flow for brand investment and shareholder capital returns[3](index=3&type=chunk) [First Quarter 2025 Performance Summary](index=1&type=section&id=First%20Quarter%20of%202025%20Summary) In Q1 2025, total revenues increased to **$214.8 million**, primarily due to the acquisition of **47 Applebee's restaurants**, which offset a decrease in franchise revenues. However, both GAAP and adjusted net income declined compared to Q1 2024, mainly due to lower segment profit and higher closure charges. Cash flow from operations also decreased significantly. Both Applebee's and IHOP experienced declines in domestic comparable same-restaurant sales Q1 2025 Key Financial Highlights (vs. Q1 2024) | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $214.8M | $206.2M | +4.2% | | G&A Expenses | $51.3M | $52.2M | -1.7% | | GAAP Net Income | $7.8M | $17.0M | -54.1% | | GAAP Diluted EPS | $0.53 | $1.13 | -53.1% | | Adjusted Net Income | $15.4M | $19.9M | -22.6% | | Adjusted Diluted EPS | $1.03 | $1.33 | -22.6% | | Consolidated Adjusted EBITDA | $54.7M | $60.8M | -10.0% | | Cash Flow from Operations | $16.1M | $30.6M | -47.4% | | Adjusted Free Cash Flow | $14.6M | $29.7M | -50.8% | Q1 2025 Domestic Same-Restaurant Sales | Brand | Same-Restaurant Sales (YoY) | Off-Premise Sales Mix | | :--- | :--- | :--- | | Applebee's | -2.2% | 23.5% | | IHOP | -2.7% | 21.2% | - Development activity in Q1 2025 resulted in **9 new restaurant openings** and **39 closures** across Applebee's and IHOP[7](index=7&type=chunk) - As of March 31, 2025, the company held total cash, cash equivalents, and restricted cash of approximately **$250.4 million**, with over **$224 million** in available borrowing capacity[7](index=7&type=chunk) [Capital Returns and 2025 Financial Guidance](index=3&type=section&id=Financial%20Performance%20Guidance%20for%202025) In the first quarter of 2025, the company returned capital to shareholders through **$1.6 million** in common stock repurchases and **$7.8 million** in cash dividends. The company reiterated its full-year 2025 financial guidance, expecting continued pressure on same-restaurant sales for Applebee's and mixed results for IHOP, with a net reduction in Applebee's domestic restaurants - During Q1 2025, the company repurchased **$1.6 million** of its common stock and paid **$7.8 million** in quarterly cash dividends[9](index=9&type=chunk) Reiterated Fiscal 2025 Guidance | Metric | 2025 Guidance | | :--- | :--- | | Applebee's Domestic SSS | -2.0% to +1.0% | | IHOP Domestic SSS | -1.0% to +2.0% | | Applebee's Net Restaurants | 20 to 35 net fewer | | IHOP Net Restaurants | -10 to +10 net change | | Consolidated Adjusted EBITDA | $235M to $245M | | G&A Expenses | $200M to $205M | | Capital Expenditures | $20M to $30M | Consolidated Financial Statements [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) For the first quarter ended March 31, 2025, total revenues increased to **$214.8 million** from **$206.2 million** year-over-year, driven by company restaurant sales from acquisitions. However, gross profit decreased, and higher closure charges led to a significant drop in net income to **$8.2 million**, compared to **$17.5 million** in the prior-year period. Earnings per diluted share fell to $0.53 from $1.13 Q1 2025 vs. Q1 2024 Income Statement (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $214,780 | $206,235 | | Gross Profit | $90,310 | $97,424 | | General and administrative expenses | $51,337 | $52,187 | | Income before income taxes | $12,795 | $24,046 | | Net Income | $8,197 | $17,473 | | Net income available to common stockholders | $7,844 | $16,961 | | Diluted EPS | $0.53 | $1.13 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, Dine Brands reported total assets of **$1.766 billion**, a slight decrease from **$1.791 billion** at year-end 2024. Total liabilities also decreased to **$1.982 billion**. The company maintained a stockholders' deficit of **$215.7 million**. Cash and cash equivalents remained stable at **$186.5 million** Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $186,505 | $186,650 | | Total current assets | $360,121 | $385,999 | | Total assets | $1,766,340 | $1,790,584 | | Long-term debt, net | $1,087,084 | $1,086,551 | | Total liabilities | $1,982,086 | $2,006,603 | | Total stockholders' deficit | ($215,746) | ($216,019) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first quarter of 2025, cash flows provided by operating activities were **$16.1 million**, a significant decrease from **$30.6 million** in the same period of 2024. The decline was primarily due to an unfavorable change in working capital and lower segment profit. Cash used in financing activities was **$12.4 million**, mainly for dividends and stock repurchases. The company ended the period with **$250.4 million** in total cash, cash equivalents, and restricted cash Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash flows provided by operating activities | $16,133 | $30,553 | | Cash flows used in investing activities | ($1,880) | ($1,174) | | Cash flows used in financing activities | ($12,407) | ($17,846) | | Net change in cash | $1,846 | $11,533 | | Cash at end of period | $250,444 | $212,125 | Non-GAAP Financial Measures [Reconciliation of Net Income to Adjusted Net Income](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) The company provides a reconciliation from GAAP net income to adjusted net income, which excludes items like closure charges, amortization, and non-cash interest. For Q1 2025, adjusted net income was **$15.4 million**, or $1.03 per diluted share, compared to **$19.9 million**, or $1.33 per diluted share, in Q1 2024 Reconciliation to Adjusted Net Income (in thousands, except per share) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income available to common stockholders (GAAP) | $7,844 | $16,961 | | Adjustments (Closure charges, amortization, etc.) | $7,558 | $3,039 | | Net income available to common stockholders, as adjusted (Non-GAAP) | $15,402 | $19,926 | | Diluted EPS (GAAP) | $0.53 | $1.13 | | Diluted EPS, as adjusted (Non-GAAP) | $1.03 | $1.33 | [Reconciliation of Operating Cash Flow to Adjusted Free Cash Flow](index=10&type=section&id=Reconciliation%20of%20Operating%20Cash%20Flow%20to%20Adjusted%20Free%20Cash%20Flow) Adjusted free cash flow, a non-GAAP measure used by management to assess liquidity for dividends and buybacks, was **$14.6 million** for Q1 2025. This is a significant decrease from **$29.7 million** in Q1 2024. After accounting for dividends and stock repurchases, the remaining cash was **$5.2 million** Adjusted Free Cash Flow Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash flows provided by operating activities | $16,133 | $30,553 | | Principal receipts from notes | $1,820 | $2,525 | | Net additions to property and equipment | ($3,325) | ($3,335) | | **Adjusted free cash flow** | **$14,628** | **$29,743** | [Reconciliation of Net Income to Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Consolidated adjusted EBITDA for Q1 2025 was **$54.7 million**, down from **$60.8 million** in Q1 2024. The reconciliation from net income adjusts for interest, taxes, depreciation, amortization, stock-based compensation, and other non-operational items Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income, as reported | $8,197 | $17,473 | | Interest, Taxes, D&A, and other adjustments | $46,534 | $43,337 | | **Adjusted EBITDA** | **$54,731** | **$60,810** | Restaurant Data and Development [Restaurant Sales Performance](index=12&type=section&id=Restaurant%20Sales%20Performance) In Q1 2025, all three brands saw a decline in domestic same-restaurant sales year-over-year. Applebee's sales fell by **2.2%**, IHOP's by **2.7%**, and Fuzzy's by **12.2%**. Average weekly unit sales were flat for Applebee's but declined for both IHOP and Fuzzy's. Total system-wide reported sales decreased to **$1.97 billion** from **$2.05 billion** in the prior year Q1 2025 Domestic Same-Restaurant Sales Change (YoY) | Brand | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Applebee's | (2.2)% | (4.6)% | | IHOP | (2.7)% | (1.7)% | | Fuzzy's | (12.2)% | (9.8)% | Q1 2025 Average Weekly Domestic Unit Sales (in thousands) | Brand | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Applebee's | $54.7 | $54.7 | | IHOP | $36.5 | $37.6 | | Fuzzy's | $26.5 | $28.6 | Total Reported Sales (in millions) | Brand System | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Applebee's | $1,075.2 | $1,120.9 | | IHOP | $855.5 | $881.6 | | Fuzzy's | $39.5 | $47.6 | | **Total** | **$1,970.2** | **$2,050.1** | [Restaurant Development Activity](index=14&type=section&id=Restaurant%20Development%20Activity) During the first quarter of 2025, the company experienced a net reduction in restaurants across all brands. Applebee's saw a net decrease of **20 restaurants**, primarily due to domestic closures. IHOP had a net reduction of **10 franchise/area license restaurants** and reacquired **10 locations**, ending the period with a total of **1,814 restaurants**. Fuzzy's saw a net reduction of **3 franchise restaurants** Q1 2025 Restaurant Development Activity | Brand | Beginning of Period | Opened | Closed | End of Period | Net Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Applebee's | 1,614 | 1 | (21) | 1,594 | (20) | | IHOP | 1,824 | 8 | (18) | 1,814 | (10) | | Fuzzy's | 117 | 1 | (4) | 114 | (3) | - IHOP reacquired **10 franchise restaurants** during the quarter, which are now reported as company-operated[39](index=39&type=chunk)

Industry Overview - The restaurant industry is navigating a dynamic environment influenced by digital innovation, changing consumer expectations, and economic pressures [1] - Companies are facing tariff-related uncertainties but are likely benefiting from alternative raw material solutions and compelling product offerings [1] Earnings Expectations - Total earnings for the Zacks Retail-Wholesale sector are expected to rise by 1.6% year over year, with revenues projected to increase by 4% year over year [5] - Potbelly Corporation, Dine Brands Global, Inc., and Bloomin' Brands, Inc. are set to report their first-quarter earnings on May 7 [1][7] Company-Specific Insights Potbelly Corporation - Potbelly's first-quarter performance is expected to benefit from digital momentum and the relaunch of its Perks loyalty program, along with menu innovation [8] - The Zacks Consensus Estimate for Potbelly's first-quarter 2025 revenues is $112.6 million, indicating a growth of 1.3% from the previous year, while EPS is expected to show a loss of 2 cents, a deterioration of 300% [10][11] Dine Brands Global, Inc. - Dine Brands' performance is likely to be supported by operational improvements and brand revitalization efforts, including the Applebee's Looking Good reimage program [12] - The Zacks Consensus Estimate for Dine Brands' first-quarter 2025 revenues is $215.3 million, indicating a growth of 4.4%, while EPS is expected to be $1.18, a decline of 11.3% from the previous year [13] Bloomin' Brands, Inc. - Bloomin' Brands is expected to benefit from off-premise channels, remodeling efforts, and technology upgrades [14] - The Zacks Consensus Estimate for Bloomin' Brands' first-quarter 2025 revenues is $1.04 billion, indicating a deterioration of 13.3%, with EPS expected to be 57 cents, a decline of 18.6% [16]

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

Coffee Industry - Coffee prices have reached record highs, with futures prices more than doubling over the past 12 months and surpassing $4 per pound for the first time last month [6] - A dry spell in Brazil has significantly impacted crop yields, contributing to the rising prices [6] - Coffee Labs Roasters signed a new purchase order at approximately $5 per bag, up from a previous deal of about $4 per bag [2] Egg Industry - The price of eggs in the U.S. has increased by 53% year over year, with a 15% spike from December to January [4] - The avian flu outbreak has led to the culling of millions of hens, exacerbating supply issues [5] - The U.S. Department of Justice is investigating potential antitrust practices in the egg industry [5] Consumer Behavior - Rising prices of coffee and eggs are causing consumers to change their purchasing habits, with many opting to skip breakfast or replace it with cheaper alternatives [9][10] - A survey indicated that consumer sentiment has turned negative for the first time since June 2024, with expectations of worsening inflation [7] Restaurant Industry - Dine Brands, the parent company of IHOP, has seen its stock decline over 13% this year, with a disappointing outlook for 2025 due to rising costs primarily driven by egg prices [11][12] - Waffle House and Denny's have implemented surcharges for menu items containing eggs, while McDonald's has not raised prices [13] - Restaurant stocks offering breakfast items have underperformed the market, with Denny's stock down over 55% and Cracker Barrel down 38% over the past year [14] Trade and Tariffs - Proposed tariffs on coffee could further increase prices, particularly for decaffeinated coffee that involves cross-border processing between the U.S., Mexico, and Canada [15][16] - There is uncertainty regarding the impact of these tariffs on decaf coffee, with industry experts seeking more clarity [17]