Dine Brands Global, the parent company of popular restaurant chains Applebee’s and iHop, announced a fourth-quarter earnings beat in their latest financial report. However, while earnings exceeded expectations, both revenue and same-store sales fell short of Wall Street’s projections.
Financial Performance
Shares of Dine Brands (ticker: DIN) experienced a 4.8% decline, settling at $73 on Wednesday. Despite this drop, the stock has shown a 13% increase since the beginning of the year.
The company reported fourth-quarter earnings of $1.34 per share on revenue of $208 million. Analysts surveyed by FactSet had predicted earnings of $1.25 per share on sales amounting to $213.3 million. Comparatively, the previous year recorded earnings of $1.32 per share with sales totaling $229.6 million. Dine Brands attributed the decrease in revenue to the sale of 69 company-owned Applebee’s units in October.
In addition, Dine Brands made headlines with the acquisition of Fuzzy’s Taco Shop for $80 million in December.
Performance of Applebee’s and iHop
Applebee’s saw a 1.7% growth in same-store sales during the fourth quarter, falling short of Wall Street’s projection of 3.3%. Meanwhile, iHop reported a 2% increase in same-store sales, slightly below analysts’ expectations of 2.3%.
Ebitda Outlook
The company’s Ebitda for the quarter reached $57 million, surpassing analysts’ forecast of $53.9 million. Looking ahead, Dine Brands anticipates 2023 Ebitda to range between $243 million and $255 million, compared to FactSet’s estimated $252.4 million.
Strategic Insights
In an interview, Chief Executive John Peyton highlighted a shift in consumer behavior towards spending on dining experiences rather than material goods. Despite challenging times, both Applebee’s and iHop, along with the recent addition of Fuzzy’s Taco Shop, have proven to be resilient brands due to their focus on value offerings within their respective markets.
