DIN - Earnings call transcript Q1 2018 | Dine Brands Global, Inc.

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Operator

Welcome to the First Quarter 2018 Dine Brands Global, Inc. Earnings Conference Call. My name is Jason and I will be your operator. At this time, all participants will be in a listen-only mode. Later, we will have a question-and-answer session. note, is please recorded. Also Instructions] this being conference [Operator to the Executive I turn over Ken will now Relations. call Diptee, Investor Director of

may You sir. begin,

Ken Diptee

XXXX John by and Brands Controller; Kalvin, Darren morning to of conference of Corporate quarter call. IHOP; Applebee's. President and Good Interim CFO, I'm President Joyce, Steve welcome joined Rebelez, CEO; Cywinski, Gregg first Dine

Steve, Before I information. Safe Harbor our turn the please call regarding remember over to forward-looking

uncertainties as in management and to today and may be known forward-looking discuss information press other XX-Q forward-looking cause filing. over is I'll may to involves are risks, assumes statements. expressed different may or turn to call, are that and implied. the to and described The the the or unknown and call also update context on and the detailed Please non-GAAP Brands factors, also statements the in are our of that, obligation and those certain which We press With results which which today's refer these Steve. factors release in evaluate supplement release Dine During website. actual information these release available measures no financial of forward-looking than press

Stephen Joyce

the I'd Dine Thank transition read abandonement Brands you, have our dining to of pleased to and very by casual the family morning, growth issued to like now today. death categories. am put news to time about the By a our is you Ken. Good everyone. to I release rest that attraction. of the press to millenials strategy false company say

and are last the half of millenials. time age growing I and of guests our businesses those approximately are are looked, under the XX; Our

sequential both, quarter IHOP comps grouping. sales showed For the second Applebee's and for

was aggressively sustain on Additionally, each business. and growth sales IHOP and are positive working in in highly which returned categories comp to positive those outperformed sales to incremental comp based and sales by traffic brand trends aided continued we to traffic respective and industry data. improvement their achieved robust

to very approximately that meeting online Applebee's needs as well variety by exceptional the in at Importantly, consecutive The XX% brands service the the growth brand and and continually platform. to since second guest to in traffic value for before can would providing Applebee's menu off IHOP's our of on This [indiscernible] quarters initiatives of culinary be quarters attributed abundan sales and highest also commitment the traffic. accounted are continued the operations improvement the overhead. premise ordering brand's With and the achieved to overall I guests. ever sales sales first of axles XXXX. first both and corporate of the part convenience Many for partially teams and traffic our franchises approach comp our quarter, bolder. for which our focus app to and rolled last mobile of increase both our business quarterly comp and the also highlight direct experience enhancements be sales out recent two remains very these changing like healthy the as includes healthy quarter experienced comp of positive is and the improve result Applebee's being

driven to overall decision-making non-collectability for and supported consumers and progress growth by quickly cards nimble drive compared delicious, the as can XXXX able one more warm to fewer being while expectations and momentum brands insights, as months premises include to great funds advertising strategy, for to ensure franchisee competitive to These favorite reasons. their [ph] enjoy to and now stabilize, in sustainable the the casual Applebee's. normalized to by made from are key national support their go-packing results the from reasonable the has together brand, with over brand expectations our breakthrough first remains believe from influence to good We aren't at advertising such in go-forward our limited changes dinning convenience meeting consumer react change to innovative neighborhood in and dining on the strides and very know encouraged to new We is immediately enhancements we guests offer Applebee's was each needs franchisees food Remember, the beyond of issues restaurant particularly Applebee's premise. continues off XX quantitative landscape, XXXX at platforms franchises our decisions. The strong the to memorable for but from health, contributions our of off last that business. several can traffic,

of complete spectrum our against We more off-premise it's price our highly of communication dinning find much value proposition, a incremental. includes business convenience; part price effective just can including so [ph]. point, that's than experiences the is in value Our strategy across this everything as

will gain stabilization growth brand overtime. that traction the early will in over would and unit year to plans progress growth to XXXX, Applebee's return the XXXX. end an of we anticipated early we gradually make continue next towards Legally, While the

As we've supporting brands committed a & franchisees. our team initiatives. two of teams no leadership are after remain we added as supporting holding that growth McDonald's. success consumer of well company, mistake, brands. years nearly we Insight Analytics to over brand, the our focused at the key Applebee's recently for XX Vice President Make on both the end, Levigne our that as to Steve us strong actively year To members retention last are as joined [ph] ensure across and the insight at focused guest our all of

a us industry includes Director Stojack years which insight Bell IHOP. building restaurant Consumer with at Insights XX post experience functions of Carrie's President Taco leading and Insights. at consumer Vice Additionally, veteran for Consumer joined as as Carrie

on specific customer teams critical brand capabilities, information best-in-class our insights decision-making. providing our Our to made had is progress consumer analytics support this [indiscernible] meaningful developing essential to

brand connection establishment the in Brands feedback sentiment To date, our of much guest through results. years to talent This Institute have and we and multiple helped offer ourselves analyze the has actual In conversations drives between to such connect to guest Dine to Dine science addition, has been of the draw able invested to decisions Research investing sales in much guest data feedback performance, from as time the competition, consumers limited more. brands. and opportunities related menus, key items differentiate and our on data what

are and we result, want than addition a brands. in to they As guest from ever before better expect our what

our very capital in totaling capital gears this and detail later. and overview investment supported provide value many quarter the dashboard significant to franchisees. our million. and Darren like quarterly These our generates brands better return the shareholders; creating and are in We our offers, us sales business priority. asset Switching trends This impact. how of first always our our in a ways reminder, little a which by drive have the limited be of Such an of our are the for cash. to provide have is few shareholders. investments a as to influence to understand that highlighted John dividend in also in factors brand brands just the can significant competitive time analyzing to $XX other ongoing briefly we return are make enables top approximately We our by and investing attractive long-term greater model growth to will of strategies specific paid

We our first the during million. XXX,XXX approximately for repurchased view investments of $XX at upside the quarter for we total Dine a stock [ph]. Additionally, compelling

You of our shift announced to capital a inclusive as continue strategy. at repurchases expect approach of allocation can't balanced part share meaningful the recently

over are further we Dine, for the by picture progress. success. big last our brands the long-term we're performance for company strengthening both great the strides at made of Looking and in stabilizing the year, positions encouraged We

this our and higher by reducing provide our interest our exposure due balance course. risk. additional We late updates to are year currently debt working rate strengthen in We'll sheet refinancing to

remains an our are international and two Turning for interest growth iconic of by improvement outside us global encouraged the business; we U.S. our our vehicle expanding in to the brands footprint

agreement Saudi of in we in XXth fact, recent location Applebee's our restaurants additionally, The marked IHOP with Kingdom opening Mexico, the opening for in In the development a XXrd Riyadh. XXXX. is signed newest Arabia of since Applebee's five restaurant year the we

build to that, to results. to Greg With over We an international growth us. color to financial Greg? going for as continue engine I'm expansion the discuss the turn important

Greggory Kalvin

you, with of Good begin recap XXXX. our of everyone. quarter first morning, a Thank I'll the financial Steve. performance for

was offset to Applebee's sales. our $X.XX the brand compared contributions a advertising decrease an EPS tax for to quarter fund The decline from our to income of national XXXX increase and adjusted $XX.X rate $X.XX due XXXX. of lower driven primarily franchise name restaurant in both increases federal by first profit in franchise operation the million Our approximately in by was gross in

meet to discussed in Applebee's XXXX. first guidance, fund XXXX national half million full a to $XX the year plan our the contribution advertising As one-time we during financial of we

million same remaining fiscal was quarter first revenues primarily XXXX, contribution Given in franchise our the quarter new versus discussed. company-operated were contributions in $XX.X of year. of approximately last in operations of IHOP The overall mainly brands. offset in for restaurant contribute same increases QX due funds the both $XX.X the by expect compared the The the June decline to the million partially decline ad brand $XXX $XXX QX, million second offset QX to of just profit to due for we The in sales in increase was XXXX in gross both the by approximately frnachise decline of sales Consolidated the increases year. this XXXX same-restaurant to XXXX. partially period franchising was to for restaurants

franchise the same versus Excluding XXXX, XXXX. $XXX,XXX revenues in period of revenues in by 'XX company-owned QX increased IHOP sales QX the

approximately XXXX to like XXXX. expected Turning was which remainder for million our separation the G&A; range first is million between in out the $X decline first $XX severance the to briefly our reiterate of first quarter declined I'd of to G&A run that related executive the that G&A to expect approximately in we the quarter occurred due $XXX quarter for what was than year. million point in rate million of first $XX higher slightly to cash non-recurring guidance year on in $XXX We of and the basis approximately of full million. and compensation our a charges XXXX. compared G&A equity primarily to The quarter

XX% in quarter compared enactment XXXX the the was the XXXX. approximately XX% Jobs rate; to Act Turning rate due year. Cuts to rate for quarter our the of in same & tax our GAAP of The of to last effective tax Tax December decline for was tax the first

XXXX. $XX cash Regarding to income approximately first the operating to period quarter decline working lower capital. flow variance for million first quarter year. and the cash the the due million from operations last flow for flows from decline 'XX for attributed activities overall net compared same was approximately free primarily were discussed. of The as $XX.X cash slightly quarter approximately was $XX.X compared to million changes for was the million first of The the Adjusted in $XX statement; previously cash to mainly in of

cash shares for totaling and capital quarterly we the Regarding dividends $XX million. allocation, first XXX,XXX we $XX.X paid million approximately quarter purchased during

Regarding results franchisees. between Currently XXXX to Applebee's health; of have difficulties financial health advertising consisting -- to franchisees franchisee's and the with financial make and progress higher XXXX. levels concentrated three loyalty continue sales due who to are non-timely financial payments experienced we lower

to and a of primarily included [ph] continue certain non-viable which assistance has of to in provide We loan restaurants related fees terminations of arrangements. today various franchisees forms waiver the co-leaders

gradual past debt the two the by made, as bad and in are Applebee's sales improvement well in over comp We encouraged progress quarters. the decline the expense brand's we've the as

we from the guidance, location and customers. adopted X January This areas; with accounting effective of two how are revenues guidance contact XXX us which we year franchise of accounting standards, for highlighted new and in two; agreements, in national how revenues and is like the recognized guidance advertising expense. from revenues titled I development primary one, Regarding affect this account

the our on revenue, results XXXX tax Specifically growth million of income plans the $X we've first part are during for both we XXXX basis. franchisee This and GAAP income and adjusted statement related operating their early adjusted increased respective the quarter with approximately will To Applebee's by both expect a expense and revenue effects pleased IHOP the for continue brands year. and conclude, after-tax. and our

shareholders invest capital returning continue strong our to We share while to drive and in dividend sales traffic positive brands two to substantial buybacks. in via sustainable

we'll that, John. Investor at With securitized year, this year ahead, discussed pursuing in I'll in the we XXXX to we're refinancing our Looking as currently turn February the our as you Day call debt update over progresses.

John Cywinski

incremental QX our over to Applebee's optimistic Thanks, sales, a organic future. with has traffic the on growth QX this about timeframe represents and continued months expense six now our in everyone. in our we've Greg comp sustained our consistently and We're pleased generate the of this very performance more outperformed momentum by CDR category and has achieved context been the decade. has Applebee's past good achieved this Throughout mission driving certainly Applebee's competitors. at into with for traffic progress the increase healthy traffic best has sales; morning, both than a at that and X.X%

results variables. met of not their of they recently around franchisees moving partnership perspective, a with it operations to financial my attributed importantly, confident franchisee a The From process and our proud guest, genuine certain be disciplined with our piece we date. starts they can multiple collaboration. of all forward and culture validation. this is Now, progress surprisingly, to strategic are are while the Most about plan

franchisee actively initiative of pursue. very that data driven sophisticated discussion, debate engaged alignment we seek and any assessment, we have as and and part We partners,

talented a In frankly, difference. is firmly addition, team and now our leadership place Applebee's in big making

results The are chemistry before that culture in we of brand comfortable team that of X past our all succeed core in one with they me driven the leaders essence remarkable. is Steve Steve ensure team decade is partner with they industry Applebee's. developed position and January. quickly joining this over to remain USA most at brand a regarded guest referenced McDonald's This Business veterans the another of thrive and true extended Joyce and the Consumer Vice to executive really oriented held Analyst. who us is over the will and our leadership Our here we've established Steve for much of to XX savvy franchisees and expects we accountability new a to with Levigne, as recent team The past year. being highly addition enroll credibility Steve & Insights in President leadership do. quite

to of of our our service, speed continues narrowed execution on variability note, level guest steadily of improved has Officer. leadership metrics key Chief restaurant under cleanliness attentiveness, the equally system-wide Particular considerably server accuracy, in our Importantly, Operations these Kevin and satisfaction; [ph], improvements overtime. operating overall course, important or

to in to cost continue restaurant our We plan house simplify leading From with of capture and PricewaterhouseCoopers. points of also reduction efficiency back a in basis operation greater perspective, P&L we productivity. XXXX partnership to kitchen XX

year profit not points to 'XX more optimization opportunity represents this Now of and basis 'XX And expect this basis. than as XXX fully if journey, well, our we full yield on we continue a annualized beyond. in pursuit meaningful as results

focus flavored around into these Now [ph] Applebee's enabled Chef culture abundant in from variety. Bogoralli our Steven in quality This strategic we his capacity ultimately initiatives portion Again, team. and reestablishing committed while increasing are mainstream culinary innovations reinvestment and on to broadly value supports appealing American culinary both for profiles.

in relatable proving leverage of we're On a our introduce eating neighborhood for evolve platforms brand execute relevant we marketing teams new the strong along thoughtful of only of what restaurant and Yashinsky, the the again Applebee's to most successful. position combination distinctive and of leveraging once innovation eyes around in Joel innovating continue we guests. brand degree and to brand good in can high the food industry. perhaps our and the is equities And the excellence. who stand way, extraordinarily as beverage defining the Chief our the front; in is Under Officer; we Marketing are proficiency leadership The with

support were while production of testing, onsite QX, media. benefit and investing $XX successfully incremental we dine million ad approximate an investment able to the the With in in

[ph]. while innovate Scott technology beginning under dividends service market responsible driven future the the and President, fully important Vice optimize real our to pay of to to this more strategy off-premise is our you'll continue Gladstone delivery investments Applebee's about benefits; hear leadership for we to-go our packaging strategy occasion. Scott convenience are Additionally, in to in

our of is turnaround of of guest cool the benefits balanced and One our unique the diversification profile. very

accounts we're our very segment users. and the group the XX%, and XX% improving or alluded XX%, GenX so the Steve believe while millennial's by at GenZ at followed at youthful -- [ph] not, core this, account for our for among closely users Bottom it driving would Now largest balance guests in-boomers to by growth frequency even also doing appear line, reach our lapsed for heavy to we extending light among incremental visit important XX%. and be approximately

portfolio as in some Now proud franchisee, Legacy acquisition long this and as our last of to of restaurants Mountain by I'll And newest recent shifting strengthen on as existing portfolio switching evolve to franchised gears our and this to the the team, anticipate Nebraska franchisees. more optimization; handful successful In warranted the also example year Dakota, upcoming to a our new of closing, [ph]. on the the We was this partners to refine to provide number calls. one existing continue of most haul. sure franchisee franchisees, by and restaurant franchisees system. early Utah Iowa well some follows our acquisition year who I'm transactions are be a selectedly for really some assets subject brand our South results. The Apple of small This of of Apple, we by additional our designed

forward. With this for It's committed are and sustained share it's remains an turn very relevance Darren. into battle, love future. to the me that relationship that, believe has and well market intense growth extraordinarily we're we nurturing positioned Applebee's While clear I well to moving for it rediscovered I'll America this to

Darren Rebelez

You offerings. the [ph] everyone. premise despite second and our sales John easters by comp new sales promotion performance consecutive IHOP's strong All driven first day increased a quarter growth Eat our from sequentially Notably, several lower Pancakes improved in good and in our The morning, off solid business. popular X% Iowa's [ph] comp Can quarter Thanks, $X.XX involved in March.

the we and experience. category comp quarter first the traffic outperform for based guest industry data sales, Additionally, in on

quarters, sales last XXX basis points. two comp by the IHOP's over Over has improved

let to go growth sales points go business up comp of We first to year. Now impressive provide me all-timers sales total XXX the a momentum. in recent color for the our quarter compared end at of last strong experienced very quarter some the quarter, accounted X.X% basis with same first To the up on XX%.

time campaign. which Solid guest which performance on including You a Can by price mentioned and of focus system very be sharpened our out We point earlier and Pancakes this national all first set. compelling aspects improvements to new propositions All value more attached platform $X.XX the a to marked Eat operational guest hospitality training experience we measurement included the rolling

the year, our with and veteran, the Haley, where past significantly IHOP CKE strategy and he the responsible was call junior Brad we Over joins from marketing of Restaurants and enhanced relations for of as for facets brains. as CMO. industry marketing addition served Harvey's all public CMO Brad us

New the Additionally, being we with Naval few. Starlot with that abundant momentum four Starlot our my new the [ph]. and buying to IHOP, Droga Alabama. conjunction a strategy result as and launch That kid fundraising Starlot, and National with pipeline her our first-ever Hospital's comments with pancake programs last executing off developed like grounded invited radio edgy talked in traffic, items in consumers steady oatmeal we're value, on aggressive guest pleased restaurants, funds experiencing pillars; in just that our enhancing lastly, market-leading Phoenix raise to we ad key resonates TV agency, campaign, strategy to showed franchisees of implemented more guest is about easing IHOP within leveraging analytics unique reciepe is What leukemia year. that and tools. Day include driving raising great and experience, innovating the running on are flawlessly crowned culinary significantly confident [ph]. new [ph] along media today $X of And IHOP begin marketing IHOP's deep our current are the We've consumer partnered the of I'm Sharon our guest a cities significantly sustain Mobile guest health bit appeared Pancake say name helped year's and effective I'll survivor, IHOP's a launched [ph], winning like enhancing being Rise Day décor former Top culinary, and told Atlanta, the layout Pancake with a useful old restaurants the groups, restaurants and on catalysts Children's remodel collected X-year [ph]. more success brand. to our her until a us campaign a significant her. were and they providing a create guest helped welcoming. new efficient Miracle and that that Kentucky perceptions but focused intercepts our part to pre-remodeled was hometown ability outdated with our 'N shaping XX that experience. of the cookie The winning Tier of reshape in program dragged to more as inviting feeling program The brand plays Shine most experience and has York, from Network and more creator. National modern how part patients feedback remodel cheerful. Based than and feels and and also our successfully pancake These open chef, helps over our to control. of IHOP's this in to We're million. kids

XX% expect XXX the first Our Rise XXX remodeled. Shine domestic have of the in of completed 'N this been the franchisees completed to system the restaurants and quarter them approximately or remodels year. Since approximately program, has inception XX we over remodel

by We at rate expect XXX driven run franchisee, year of program. completion are to about enthusiastic XXX they per to remodel range healthy the pace of the continue until in

[ph]. go relative noticeable on a to guest scores seen dinning where guests value, key With to and experience. mobile in omnichannel MTD technology our dine. focused in beverage, mind, sharpened on launch from we how improvement basis As continued experience. website and resulted virtually overall engaging according as we our but decide and traction experience experience, across outside In satisfaction absolute mentioned to an I and food service both our price rollout such categories intent the technology also an influences and all solid from hand-in-hand; the restaurants world, we we're on seeing our app. revisit, focus our our of and enhanced inside This guest of only improvement data in that to the through peers. earlier, Not today's our have We're

fact, the orders online XX% was In quarter. higher average to-go checked all and in orders the premise are over our in approximately first

of lineup of With new feature guests on screen the all The menu, three feature our the launch with download international and to engage our Once entered introduced with the are [indiscernible]. we Since technology in of inspired the rolled This IHOP's out, pancakes strategy to leverage our we all and they to new our of guests mobile of than a the uploaded internationally into them guests feature and passport part international have visit our entitles engage fund to our pancakes taken app, passport raiser the seen three downloads so order restaurants pancakes. guests app. frequency. drive have to pictures more app, is app double.

the enjoyable to currently our year. with of end upgrading leverage to of and them. into [ph] their expect restaurants the Comcast in a experience us wanted by guests more Our recently We've strategic relationship Wifi we let make completion entered are and technology all and

appropriate Our to focus from eliminate pressure [ph] where that points guest leverage is to experience. technology

provide initiatives on course the we'll updates have those We year. achieve this during the and test several to and of plan

in operations. great running and franchisees We implemented support. pride great several enhance to operations turn initiatives restaurant training [ph] IHOP takes embedded restaurants. let's and franchisee to Now

to system For team IHOP restaurant topics, out our our level several quality instance, support the and guest in and franchisees work other areas the program Wifi training we such guest technology outstanding as as our recently several the great great facilitate on rolled and outbreaks enhanced for outstanding food engagement, continue food to platforms. Play in-restaurant which online The metrics. better earlier focus in for N more will discussed out that on I-hospitality enhanced service. receiving delivering well an at rewarding making results of franchisees guest platform for support by scoring do encompasses focusing our Dine satisfaction contains guest rolled performance centric it members the rollout teamwork. We service food new to and as

to operations, field we local structure third Lastly, culinary changed holistic support team continues provide to training innovate guests. create the Switching our resources IHOP's regional a at strategy, franchisee gears level to highest and driving level. having six marketing to organization to at impress teams traffic. more to address needs the

traffic Our famous pancakes and deliver the the world sustainable only abundant but introduced value guests. quarter, is balance also we compelling with guests We're provides plenty we want a delivering proposition to it. on largest a provides value more bold omlettes perfect have taking big of first our our create not In variety housing We're price action for which our will drive for with sweet and we and of around savory. variety and and to value the which a menu guests food we believe drive opportunities traction. positive

creation traffic. includes signature off in More items we've through than pancake culinary front, buying recently best is the of highlights section also driving innovation which the and Innovate the ultimate from team. this is waffle the portable unique as and the IHOP On section new quarter breaks launched to that menu creativity stacked our the crucial half sliders such advertising sandwich. of

restaurant. IHOP anniversary guests unvieled to the we to conjunction plenty XXth We'll coupled share and as new keep new top mind quarter buy our over part to with pancakes to news with anniversary of celebration. our of to of first media shift few IHOP's have the [indiscernible] in creative pancakes, months launch in next campaign our pancakes, XXth During a the attract

is. a our fully mobile Turning deployed to and growth the app, final our premise online saw business. column, being significant where continued by we platform guest With ordering supported the our off in

convenience comp growth the of the technology given simplify creations sharply will improvement the an We traffic needs continuing our business, of premise operations. have delivery a chat. of deferral new off affordability the items. test in integration our menu served on work the sales positive solid more We believe high of of increased impact who half very quarter and restaurant First guest remained meeting to on to are a by IHOP sections than of focused

our new quarter our we they the to brand, openings Regarding sites healthy pace restaurants where currently first they the encouraged return development; quality This We this expectations have openings quarter. are over through the by unit by a we globally opened first are generate line at building of in develop and of decade. franchisees franchisees our with strategy. in confidence continued first the state the pace of a [indiscernible] with in To a on strongest in XX quarter and point and four close, investment. IHOP identify are their in

confident Steve current our to now and ahead, a in Looking drive back call sustainable we're comments. positive that, turn With momentum the I'll and for to traffic. over build Steve? sales ability closing

Stephen Joyce

on shifts believe close, Thanks, Company's culture. significant I To Darren. will philosophy our in based developing impact a further have positive the a performance

loved We experiences. Brands while grows people united are most the and great communities a together that memorable brands a and Dine and eat food worlds company restaurant happens community that believes nurtures have dining when

it's team accountability, be our celebrating while will culture and franchisees and members. by recognizing transparency, driven innovation collaboration Our

are brands we and very the both Our gaining growth by for results strategies early this are year. encouraged traction

path long-term team members I franchisees the by driving marathon We sales work traffic. sustainable always strategy on is great focused are being the and execute know a applaud who not a and our and sprint. success laser done everyday. positive We of

strengthen working long-term are them model brand At we'll the to our we respective desirable benefit of steps business franchise to or portfolio. insurmountable of taking necessary our highly sheet position XXX% to improve the our level, to invest leverage will Applebee's built We're the IHOP the balance corporate brands. in leaps expanding in and further to success We strategically their and score prudently and categories. continue

So the and for sum dinning we which ourselves brand set We've us; is confident high for outlook will great. I'm achieve. very can goals

pleased might Operator? to call Now for open any we'll question be have. you the

Operator

Maxim we Group. first have And The Stephen Instructions] [Operator Anderson from

Stephen Anderson

numbers the same your restaurant the rather the ask your some about I the actually We've that growth is versus from got wanted your talking is want into about of how strategy. to specifically about franchise company-owned sales a influencing they there more premise, and franchise delivery discrepancy. showing note and peers delivery one off

it first with concentration delivery so markets. companies to wanted of we've what -- the a to your And what third-parties? penetration in partnering I ask; is with of that units more be think want all might far areas is these strategy I the see I so your fact want on to-date? in

Stephen Joyce

Okay.

So [indiscernible] us. are for let deliveries component I'm Obviously, question. very going the to important the

on takeout. actually are primarily We focused

in XX size which But this percentage can't. system, with is folks. relationships me plus the want the basis based that's through brand However, and be we're let and let the to business. the going our deliver we're wherever trying delivery, their our key delivery expand if at guest on of got we continually that coverage the point to several of talk point we've stuff Obviously

John Cywinski

We're our with context delivery astronauts perspective. Steve the that we've referenced that so XX% access are specific deliver to citizen dialogue and timely of XX% Jordache Amazon. from leveraging have so the reached can your coverage; the [ph], incremental; we of partnerships XXX and moment; with Applebee very logic at be that XXX delivery and certainly would be in an in a actively restaurants approximate

Darren Rebelez

same with franchisees [Technical as we Eats XXX essentially Difficulty]. engaging John now echo what the Uber here. restaurants have would about We're well. I with delivery said, Amazon it's [indiscernible] in really do right testing just and some

Operator

from Michael C.L. have we Next Gallo King.

Michael Gallo

to the obviously into second similar confidence morning, the you congratulations advertising, won't of wondering made fund, a guess we and the certainly, of year of half you've level I as Thanks. in contribution as help your have contributions of the Good John; the and you improved increased beyond I continuation incremental how wage [ph]? and will having that of contribution? national benefit doing benefit bridge you momentum. the advertising get are second that plan of in -- have year-over-year the question terms franchisee the had what and was here quarter. level to on for advertising And John additional that you maintain you

John Cywinski

if would upon concerned remain therefore rate advertising contingent we then your our first have that's about frnachisees question. performance our year the the the advertising I'm half So assume not to that commitments extensive your we some had contribution there discussions and and point confident And question. I back remains same, very of of with we ultimate

Michael Gallo

brand -- able flavors the perhaps like about guess have about that might was and I of different in [ph], then, think bring should you've are you enormously some Riblets historically year; And year? your think kind had some back think successful coming -- a Thanks. John there successful doing what obviously, lot more we the in different meaningful from and as some which early analysis [ph] that such the that in of back been to other item you've of lot success items forms about should back go Riblets to equity, the a of later I to opportunities items some mentioned we you analytics;

John Cywinski

that's Michael, I accurate. think

are are on reservoir around and stay For so I and those of untapped don't that our me believe Applebee around of is as we innovation any bit stand a we lose and possible we who of everything potential do. and don't constraints what's equity there guest focused for equities in long sight core

can yes, innovation and from not validated a but -- expect innovation you smart financial. but perspective guest So validated operations continued only

Operator

question from JPMorgan. last from comes Our [ph] John

Unidentified Analyst

looks first like notes, the much I it mean, guess than softer the lot the -- ended began to quarter. softer the According a transcript so quarter I in or where it

the you and something out which the with we to platforms done really on. permanent industry that's question I opposite that volatility went we of of have if migrate of LTOs are are putting are especially business, So hoping that, permanent in they're the variability comp more month of of them comfortable seem you're LTOs relative context quarter inter-quarter of has the the in that to business? into could the the asking running your maybe doing guys I'm can as having what about kind that some trend, supposed or strengthened if that kind the talk which take this to the mean promotions, that

Stephen Joyce

no the profit. is want into quarter we based we month assessment effective with I additional fact, both are as highly variability and momentum for has We quarter that of our And the driving our we out, are which second within and traffic early riding month but your end. promotions the were way the franchises to the continued by at very opportunities very played the quarter. quarter during think I satisfied on quarter deceleration but would the the the to drive and that beginning had within say and talk the was not there in say that accurate. quarter I would

say look progress being that you build. our I momentum consistent continues would as should at the and and steady So relatively to

Unidentified Analyst

a But a you something did that wasn't the five ago? mean, with begin talked you couple quarter that about months -- I

Stephen Joyce

did for it We Applebee's.

Unidentified Analyst

I talking clear, and question Applebee's apologize; was sorry wasn't my was was specifically to about. XXX% what if business. I Yes, it -- that's that I'm I the mean, related

Stephen Joyce

providing driven think really on there no a say talked as month them January look based continue others, particularly and the we're -- positive Riblets that so do but we than so strong variability at were results that well was about I having is I as we expect a Obviously, more in is at are rather on but which view to motion there well would the was to that positive very by deceleration months acceptance I so is strong and it to the other we I the as of based of and we where promotions. which look January But would all and -- and LTO Blue are [ph] and Moon, received. successful as the you also are,

John Cywinski

objective Plus tell a every quarter. a have slightly and the with tends tactical would perspective, and different we're event very from I throughout pleased strategy; business moment our you promotion to traffic and our

Unidentified Analyst

over within -- possible relief kind is it casual the some to same-store is and the casual must And on? have of of of there lot your talk family to their we traffic baseline your And have in kind first the the then as quarter terms of consumers and in out telling rally just plan uneven the the secondly, lot are could taxes that maybe reaction middle benefit you to that some the I certainly see a you is overall about next year? mean move to but about branded play dining, quarter I for that for and consumer you first of of dining year. way guys dining throughout of very what thoughts you some from obviously are of analytics big in there starting and enough the really going outlook mean, whether weather been built your the kind or next just paycheck

Stephen Joyce

flag seeing seeing very want is which the don't record which that's a all incomes category maybe has certainly low I so a early may it's that. to for which call same from well of to unemployment. be we're the employment dining we're level thing represent enhanced casual it that; -- bode to confidence robust, driving on but the tailwind think spending category it increasing In a I some consumer but may the household bit but future in perspective little early a my improved

Darren Rebelez

as business I'd bit where consumers I'd view market family it we shape in of and situation still this hold add so a say better dining they as perspective, still and comments from little well a those we're on compete; take share going incremental a still money. competitors. to as for and having competitors But some this told so traffic you take have to we're competitive to nearing we highly environment share our our more from and

Unidentified Analyst

points And work. before is, final much XXX PwC portions be 'XX from call some run fiscal rate the comments And on the some think PwC the the the of another basis the XXX that the in a in coming points about at then related less I in to from savings coming PwC this perhaps sense system that I we And how labor margin work. equaling get secondly, XXX work have whether in do place be question; basis talked or know from One, way franchisees? XXX the PwC had points basis potentially will to know, then you will you? the think just reinvested others you game savings pricing or few to of kind wanted of or deliver what of what have end back work cost

John Cywinski

Insightful that the in or franchisees, Applebee at question; very have XX enthusiastic we are so this. so system the

it's multi-year in with initiative, is experience this journey a other with So a brands, having optimization had profit particular, PwC.

and big on will expect most basis is that at would Applebee's basis XXX food be in would be XXX an an and of on the the but that labor points unrealistic not into that objective perhaps annualized overtime. And goal be this basis, annualized right 'XX. a by lead I an in -- ultimately then You're bold way basis would some XXX of -- points plus captured would related initiatives

Darren Rebelez

rate actually begins start the various is kind to run start different an But food The run ability the same we similarly times capture overtime fruition. so as both stuff points realize the savings at labor. run contingent on and this going these opportunities it year have and really you to then in in rate to build with the opportunities will and that on and of at annualized throughout are to year PwC initiatives brought We rate. see the

Operator

our question-and-answer And that concludes session.

Stephen Joyce

for again you today. time your thank Well,

then. scheduled are you speaking look on a We quarter to with good we'll August X. for to results And day. forward Have the report second

Operator

participating today's this disconnect. concludes you you Thank may now for gentlemen, and and ladies conference. you, Thank

Dine Brands Global (DIN) 2 May 182018 Q1 Earnings call transcript