Dine Brands(US:DIN)2022-03-02 18:23Financial Data and Key Metrics Changes - For Q4 2021, Dine Brands recognized revenue of $229.6 million and EBITDA of $60 million, reflecting strong brand momentum and consumer commitment [9][10] - Adjusted EPS for Q4 was $1.32, up from $0.39 in the same quarter last year, driven by a 43% increase in gross profit [22] - Consolidated adjusted EBITDA for 2021 was $253.3 million, compared to $158.7 million in 2020, indicating significant business recovery [24] Business Line Data and Key Metrics Changes - Franchise revenues for Q4 were $162.9 million, up from $134.8 million in Q4 2020, primarily due to increased royalty revenues [21] - Company restaurant operations saw sales of $36.6 million in Q4, an increase from $32.6 million in the same quarter last year [22] - Applebee's achieved a comp sales increase of 6.2% for the full year 2021 compared to 2019, while IHOP's comp sales declined 3% in Q4 due to various factors [38][47] Market Data and Key Metrics Changes - Average weekly sales for IHOP and Applebee's surpassed 2019 levels for the second consecutive quarter, with Applebee's outperforming its comp set for six consecutive quarters [9][10] - The off-premise business for both brands grew more than two times compared to 2019, indicating a strong shift in consumer behavior [14][50] Company Strategy and Development Direction - Dine Brands is focusing on technology investments, menu simplification, and off-premise business growth to position itself for additional growth in 2022 [7][12] - The company plans to open 50 to 65 new domestic restaurants in 2022, marking a shift from defensive to offensive strategies [33] - Dine Brands aims to leverage its scale to mitigate supply chain challenges and enhance technology investments [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about transitioning to an endemic phase of COVID-19, with expectations of reduced restrictions and improved staffing levels [11][63] - The company anticipates inflationary pressures to persist, with commodity inflation expected to be north of 10% for 2022 [28][38] - Management emphasized that 2022 is an investment year, with expected benefits from these investments materializing over time [31][72] Other Important Information - Dine Brands generated adjusted free cash flow of $191 million in 2021, a significant increase from $106.6 million in 2020 [25] - The company ended Q4 with total unrestricted cash of $361.4 million, up from $304.2 million at the end of Q3 [27] - A new share repurchase program was authorized for up to $250 million, replacing the previous plan [30][35] Q&A Session Summary Question: Guidance for 2022 and underlying assumptions - Management noted that guidance reflects initiatives for comp growth, development growth, and new revenue channels, with a focus on growth beyond Q1 [58][59] Question: IHOP's operating hours and franchisee perspective - Management is confident in returning to pre-pandemic operating hours, with staffing levels improving to approximately 90% [60][63] Question: G&A guidance and drivers - G&A for 2022 includes investments in technology and unit growth, with no expectation of significant increases beyond current plans [66][68] Question: Franchisee profitability and inflation impact - Franchisee financial health is strong, with all deferrals repaid, and they are expected to manage inflation through strategic pricing [70][71] Question: Long-term EBITDA growth expectations - Management indicated that 2022 is an investment year, with expectations for margin expansion and sustainable growth in the following years [72]