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Wall Street JournalEN
Based on the provided financial report articles, the title of the article is: "Dine Brands Global, Inc. (DIN) Quarterly Report (10-Q)
Based on the provided financial report articles, the title of the article is: "Dine Brands Global, Inc. (DIN) Quarterly Report (10-Q)
Dine Brands Global, Inc. (DIN) reported its quarterly financial results for the period ended March 31, 2025. The company’s revenue increased by 4.5% to $1.23 billion, driven by growth in both its Applebee’s and IHOP brands. Net income rose to $43.1 million, or $0.27 per diluted share, compared to $34.5 million, or $0.22 per diluted share, in the same period last year. The company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 6.1% to $143.8 million. As of March 31, 2025, DIN had $1.15 billion in cash and cash equivalents, and $2.45 billion in total debt. The company’s stockholders’ deficit decreased to $1.3 billion, compared to $1.4 billion at the end of 2024.
Financial Performance Overview
Overview
Dine Brands Global is a large full-service restaurant company that owns and franchises the Applebee’s, IHOP, and Fuzzy’s Taco Shop restaurant concepts. The company has over 3,500 restaurants worldwide and operates in six business segments - Applebee’s franchise operations, IHOP franchise operations, Fuzzy’s franchise operations, rental operations, financing operations, and company-operated restaurant operations.
Key Financial Results
For the three months ended March 31, 2025, Dine Brands Global reported the following key financial results:
| Metric | Q1 2025 | Q1 2024 | Variance |
|---|---|---|---|
| Income before income taxes | $12.8 million | $24.0 million | $(11.3) million |
| Net income | $8.2 million | $17.5 million | $(9.3) million |
| Effective tax rate | 35.9% | 27.3% | (8.6)% |
| Net income per diluted share | $0.53 | $1.13 | $(0.60) |
The decrease in income before income taxes and net income was primarily due to a decline in gross profit from franchise and rental operations, as well as an increase in closure and impairment charges. The higher effective tax rate was due to a lower tax deduction related to stock-based compensation.
Revenue and Profit Trends
Total revenue for Q1 2025 increased 4.1% compared to the prior year period, primarily due to the operation of 47 acquired Applebee’s restaurants and 10 acquired IHOP restaurants. However, franchise and rental operations revenue declined due to lower same-restaurant sales and fewer effective restaurants.
Total gross profit decreased 7.3% compared to Q1 2024, driven by the decline in franchise and rental operations gross profit. The franchise operations gross profit decreased due to lower sales at Applebee’s and IHOP, while rental operations gross profit declined due to lease terminations and lower percentage rent.
Strengths and Weaknesses
Key strengths of Dine Brands Global include:
- Diversified portfolio of well-known restaurant brands
- Highly franchised business model that generates stable royalty and rental income
- Ability to acquire and refranchise restaurants to optimize operations
Weaknesses include:
- Declining same-restaurant sales and restaurant closures at Applebee’s and IHOP
- Increasing closure and impairment charges related to strategic realignment
- Reliance on franchise and rental income, which can be impacted by franchisee performance
Outlook
The company’s outlook is cautious given the recent declines in same-restaurant sales and the need to strategically realign certain markets. Management will continue to assess opportunities to refranchise acquired restaurants, while also focusing on improving operational efficiency and franchisee profitability. The company’s highly franchised model and strong liquidity position provide some financial flexibility, but sustained declines in franchise and rental income could pressure profitability going forward.