DIN - Earnings call transcript Q3 2018 | Dine Brands Global, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the third-quarter 2018 Dine Brands Global earnings conference call. My name is Paulette and I will be your operator for today's call. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the call over to Ken Diptee, Executive Director of Investor Relations.

begin. may You

Ken Diptee

Cywinski, morning conference Good Tom to Brands' be and Dine CFO; Corporate Gregg Thank will Controller, I'm and joined XXXX also John IHOP; of call. Rebelez, for CEO; of by third-quarter Applebee's. Darren Kalvin, Q&A. you. available President welcome President Steve Song, Joyce,

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

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

Steve Joyce

you Thanks, Good for everyone, Ken. and morning, thank us. joining

saw flow free across XXXX. of comp you sales adjusted both first we several our at revenues, as today, in profit, the growth As cash EPS, adjusted press as nine key year-over-year total delivered issued release gross metrics, including for brands, months well

Brands on I we potential. Company a over priorities strong believed substantial position full untapped had Our joined EBITDA long-term potential flow realize our When and strategic CEO highly cash and I to our at little free Dine healthy generate ago, margins. had knew to execute to year for brands continues very three success. I a this franchised model as

Dine on sales months, company. priorities. to Over traffic progress and we the performance, to very these returning on comp each pleased that positive focused great importantly, and culture, of Today, say driving I'm made establishing sustainable high XX a a last we've value-based growth

culture This that We on an market an to innovation. performance-based on robust have a enables emphasis much in and and our We've more positive to continuous us people places sales and both focuses adapt great implement condition ever-changing our competition, strides provides share agility, improvement made steeped accountability, additional the strategy. and expansion of as our upside from us needs guests. taking for in which at brands daypart the we values

and hard respective like that ranked the IHOP consecutive that on based is sales I family and systemwide dining domestic this Nation's categories News outperformed fact, commitment third traffic. and same-restaurant to quarter a would one year by their XXth testament were In brands our work consecutive is franchisees. best-in-class dining, to of highlight in number Restaurant the based again sales. for the both have casual achievement and Applebee's This on respectively,

company strategy an Lastly, build gaining sales momentum to a can to we execute drive and confident that We're as we our transition this elevated traction. growth on guest-centric traffic. is

investment guest, the highs to satisfaction to service. in I'm every result in of highest our during with guest commitment to to pleased technology, in and is level variety our engagement overall member scores team excellence operations our ensure both and menu restaurants. This placing and initiatives achieved report us. house give what with day. emphasis back of provide guests the of our focus research and on consumer-facing both are our fulfill guests from guest seeing brands We're plan, our difference, reason quarter. of that providing the increasing the the the want and value, on enhancing our to as the everyone this insights part expect are we're an We're through consumer innovation visit guests culinary As we to third guests front all-time abundant a every

provide an create remodeling where memorable great with food. also experiences Our over includes to to as strategy inviting genuine their our restaurants come guests selves atmosphere authentic can they

out access of to delivery enhance delivery national with color our convenience address some platforms announced To leading on recently Applebee's our better Lastly, nation's delivery DoorDash, we're guests. brands of rolling IHOP this, to and provide third-party the and platforms. partnerships needs one nationwide the

brands mobile available app. are and on their website options Our

and they Additionally, John DoorDash more later. systems will and on is ordering systems integrated websites our provide our complement will details existing and apps. delivery delivery call dispatch. to believe capability ordering through IHOP's mobile We online available connected little online Darren a fully Applebee's through a

food two efforts six Our that use restaurant on technology the on remain companies guests car and and make digital ensure suits loyalty. Investor categories reward of to you only greater an our platforms dining experience leaders we're know initially dining of that technology their connected role that to our build they Motors' Day guest-facing were focus are selected which consumers met. consumer will lead important platform, our collection needs We our guest To in want decisions At allows food more and and traffic, February, to in in whenever General IHOP technology against the go. plays dinner to it and it to personalized we so the and Applebee's a participate order competition, drive insurmountable data told provide them. making consumers' I wherever crave reservations increasingly in an and

are. friction matter embracing points strides, great us guests. for ahead guests enhance experience, reduce to technology additional where As engage have you in of create updates guest provide they we're see, competitive We'll the still more our some work course. broaden but to differentiation made and with can to We've due further no ability

$XXX to variable approached. X.XXX% on on to and evaluating as funding time. In we debt to call million our refinance existing our us current briefly VFN securitized gears a debt not growth ample $XXX provides switching outcome. market, long-term fixed refinancing intent attractive to debt. to Now, investments maintaining further at as our million flexibility decided refinancing. still and the our replace view significantly note August, of a upsize window We this with while we very financial from announced our for After securitized Upsizing our favorable the the debt pursue the

continue Now and closely to opportunities the results. market to to we evaluate turn over Tom call Tom? the that, will going monitor With financial I'm for refinance. to discuss future the to

Tom Song

Good morning, you, Thank Steve. everyone.

for comp two EPS XX% increased the drove for We million a increase operations of quarter gross strong mainly turning revenues increase to in performance year. compared X.X% of decline the was profit. guidance. income total X.XX% and of this pleased last IHOP a gross increase expense revenue, XXXX quarter, briefly The the primarily of to a growth in performance which our approximately increase any Applebee's $XXX of were last third compared quarter quarter contribution expenses. in of with for Adjusted XX I'll The by These offset G&A third double-digit Applebee's and profit year. debt are mentioned bad XXXX our XX before due by the very same Total unit partially items to due from franchise third last million to to financial performance due brands cover for over taxes in for $X.XX the revised on third IHOP our sales, approximately advertising sales quarter primarily a in growth higher was $XXX to Applebee's the rate gross months. previously were increase XX% in to the growth corporate months. impact the the the comp decline was unit advertising profit and $X.XX lower in due tax higher quarter The to last rate. increase the over

to robust advertising quarter quarter the for the expansion same reminder, dollars, new a quarter for third quarter second recognition approximately XXXX as of when you quarter the revenue the third standard. XX% XXXX, reflect approximately XX%. of for Adjusted were compares year. both a of And this margin look last it was third This at EBITDA XXXX. sequentially, XX% and Just accounting margins XXXX excluding

increased would reasons highlight that the primarily G&A. I the to incentive higher slightly to cost expected was million technology rate of to that XXXX of G&A of reprioritization year of quarter was while the for the G&A like decreasing and that quarter compensation other Turning half approximately we and CapEx. stock-based due quarter third of to G&A $XX approximately third projects the due our third some XXXX. higher in just discussed. was increase to second million for for compared $XX run the the The mainly

just Steve debt, debt window notes third our costs, debt refinancing the approached. as our refinance our to Regarding call during replace quarter, opportunity our we on long-term is existing This variable something funding explored the the mentioned.

compared assess did that significant the merits environment the refinance, the of upsizing financing interest a decided we with we matures three rate in years, While funding current of to the the which variable to adjusted to proceed a with is reconciliation. incurred credit associated approximately process, million costs note which the $X.X in GAAP refinancing We scheduled facility, EPS this facility. in is similar and

deductible approximately by The was goodwill year effective to $XXX was for of XXXX to Jobs same of effective impairment tax impacted the non-cash rate, of Turning for tax tax impacted last rate XXXX rate the our income briefly which related the our by tax and tax for the GAAP Act. enactment The federal Cuts the was December of not Tax rate of purposes. XX% XX.X%. was third quarter Applebee's million, quarter

months of receivable statement, months for nine same other flow XXX,XXX due partially not working nine charges due million equipment gears first non-cash and The the in amount to half share in due Switching to in million the repurchased of in third was million approximately were million XXXX. to for cash of XXXX contract of same per in first Applebee's adjusted first just XXXX $X.X income the approximately the average of assets free the one to capital. a $XX.X increase offset compared increase the discussed from of income year. in at million of $XX of from XXXX million. year, was These we flow discussed capital Adjusted increase same $X.X and our goodwill an net of the the operating impact for nine in by payoff to for cash $XX last favorable flows cash of primarily $XX.XX period the for allocation, were primarily total increase $XX activities loss operations $X did period price million an Cash million net first in a $XXX.X period primarily compared to was increased related the the to shares for the net the in of The to approximately changes CapEx. just million cash that the from items the recur. quarter from $XX and the last approximately free for months Regarding approximately XXXX intangible the of flow increase approximately impairment year.

first the price of year, for shares repurchased months of nine million. a $XX.X total For average approximately we of share per $XX.XX an the at XXX,XXX

of payments, respectively. our we cash paid per cash share of Turning the for second fourth we dividend in declared of XXXX, third-quarter the per share $X.XX $X.XX year-to-date million. a dividend representing paid approximately of to XXXX quarter cash dividends total in totaling first and $XX share $X.XX of and basis, declared dividends of a a a On dividend quarters million, per $XX

our to franchisee franchisees. of we health, continue progress Applebee's to on financial health addressing make Turning the

were in million compared favorable During same expense there the decline approximately last period $X by resulted year. the third of quarter debt to that in developments bad XXXX, a

there of was in due Additionally, uncertainty revenues a unrecognized to collectability. decrease

which we during is expense bad reduction call. earnings year, first-quarter debt of $X full $X from to projections a expect approximately million, to million be provided the million our For slight $X initial our approximately

we purchase As to restaurants North from asset franchisee. improve overall to Applebee's XX agreement and brand, the of of acquire part the one Carolina South strategy located health in our an signed

that of this operate transaction terms. restaurants the like under close of alter re-franchising would the in favorable a with to intend transaction We asset-light strategy. goal does to We these our not expect I them XXXX. to emphasize fourth quarter

between solid costs expectations and due update between related previous like is X.X% positive I'll and expectations was to of I'd range share restaurant. associated primarily of and now momentum, due the the a revision to comp plan turn the sales previous is and Applebee's remain guidance. of to business an for to see We to and and This between mainly This costs, we now performance-based X.XX%. million and $X.XX. financial expectations to $XXX free in the previous million, to the are previous process costs in between With range to $X.XX respective The range to range the litigation between we but reprioritization traffic incremental leaders on range range revisions, months per brands for was that, of IT $XXX This close, $X.XX. complete performance positive million. and release personnel-related sales previous the expected on and million to diluted categories. The slightly earnings $X.XX. now their and to between of positive GAAP refinancing highlight the lower an Applebee's sales of nine diluted X.X%. to projects. between This few $X.XX and $X.XX. increase $XX $X.XX comps range over and of and and $XXX guidance. please now our our sustainable through and compares $X.XX are first with range downward comps X%. million. in positive is our briefly press Turning call to X.X% $XXX between to X.X% expectations capital million approximately expect year, to now positive expenses between a We between X.X% IHOP's per expectations The further X.X%. due positive improvement positive closure expect drive year-to-date positive previous to higher grow $XXX to share to earnings expect G&A between $XXX million, $XXX million position mainly between compares compares now cash Adjusted of now expected expected executing approximately John. to our incurred expenditures. flow and To in off-premise adjusted to compares Because

John Cywinski

consecutive accelerate of the of result good as comp QX Tom, past positive represents everyone. four quarter growth. has each quarters comp is plus X.X% continues a sequential morning, fourth increase Of momentum note X.X%. sales to sales Thanks, improvement in resulting and Applebee's delivered our our that year-to-date of

our Applebee's of health relevance, growth in majority sustained reflects of of coming This the appeal brand. traffic. enhanced growth Importantly, and is the organic the form the

as question, as in this the with and fast proud to least traffic Box. sales share represents we're attribute on Now, resilient sustained franchisees, dining, of our success our exceptional this these demonstrate at also QSR restaurant outperforming ability dining to operators and family sales results according and categories both best the steal Applebee's We're consistently talented team. casual, the traffic passionate and Black our casual collaborative performance performance Without it their XX years. I established and partnership Applebee's they've to

remarkable credibility faster team genuine happened and leadership the bit more established our positive now and stability a has of has now accomplishment intensely in competitive for here and its this predictability. year, they've is turnaround a category. on comp have we're been yes, positive this this a momentum truly this consecutive At in to From anticipated October. than has Upon a in continues And Applebee's impressive. Importantly, trust, of and our CDR than place path and point, some strategic roots. perspective, weeks delivered a franchisees sales year reflection, returned XX mature belief

this an Neighborhood for the as to appealing and contribution of importantly, We're love holding while this continue metrics On the is and Bulgarelli's is menu benefit front, to have our occasion-based extraordinarily market. items, age We'll also focus families, to Applebee's. both Chief positioning priority. to innovation diversity our enhance recently earn both leverage to of household Progress diversity with national additional love fact on we'll We CMO, we Chef family of have under abundant media of brand leadership $XX,XXX, time form all value-seekers, to our our at most profile the our rate. value X.XX% marketing pasta and with the fixated against and a a seen Under over-index we demographics is creative, programs and sticks consistently core XX% expectations. unique continue represent perhaps place loyalty very guest popular of the income Halloween. friends the you've category. surprising Hispanics over-index I'm that innovation Eatin' remain Gen African-Americans, Yashinsky, and Applebee's Carroll. and to routine the to and millennials, in new with report average of to on on Boomers, remain DNA our the on initiatives. guest pleased of show predisposed in This significant national Xers Most across X.XX% to traditionalists standards of Operations now on three additional We continue comprehensive delivering muscle operating we come committed Good and embraced a buzzworthy the an and improvement. In will a guests key consistent and satisfaction that excellence as top are significant targeted, well-positioned timely our millennials and interaction with restaurant-level and as continue leadership bread Applebee's at beverage rate, of important one and Joel with the to relative for Officer, our here CDR contribution front. connect very us, folks mainstream with variety our insight-driven largest guests, well-defined culinary franchise neighborhood partners these preference segment guest and Dollar broadly continue And Kevin exceeding guest Zombies

is which we year-end of demand our in on Scott Gladstone. majority expect our mix. substantially years. VP CDR sales capitalize addition coming over while with no the is X,XXX And to now our by is emerging under accounting half to also total Our our off-premise highly of business business grew to total from XX% sales brand positioned vast in of XX% being of catering leadership sales of XX% next QX, XX% approximately than our fully business current our for Off-premise dine-in in and off-premise outperforming to my delivery from From other the coming the the few Applebee's from off-premise core business, almost category anticipate perspective, of go, to we restaurants is half Strategy, growth offered balanced, incremental as strategy our better business. off-premise the double

my challenge featuring Again, refine mind our approximately X,XXX against at the has look progress, to we continue status doubt Darren. no clear rediscovered slowing approach we spirit. core continue of Applebee's for We In initiative our and couldn't love our wonderfully underperforming as With it XX distinct currently a quo steadily closing, in Additionally, but to franchisees portfolio America this close far we There market. brand-damaging very and next to next that a turn restaurants. disciplined the restaurants anticipate or that in end year. are our sophisticated smart this with strategy as higher execute forward this to year. franchise its team, I'm partners is certainly business confidence to optimism advantage yet we it's be and from US our entrepreneurial me restaurant to as is with a model I'll competitive that, pleased base significantly our of satisfied. proud of we our who and year

Darren Rebelez

sales We've momentum dinner about to lunch everyone. into is broad-based We're being running John, the and guests continued guest Box third to and that experience, plan trend significantly third our you, All continue sales is. new attract we the the to period narrative X.X% year highly outperformed occasions. growth. and pleased in guest as innovative changed positive sales We've dinner and am every and family dining which we breakfast. strategy, data. the of great the against drive based traffic that and has I at delivered throughout on right. execute traffic platform increasing IHOP's sales quarter We've launch all quarter, marking encompasses comp our morning, Ultimate comp traffic where IHOP's important category An restaurants, sustainable this daypart driving can the proven Thank this Steakburger that the the good consecutive Black not comp positive enhancing day, sales confident daypart of part to week. of Since clearly is according every and sustainable expansion. our our mid-June, report just

experienced We dayparts. the overnight sales across growth positive and also lunch

of new breakout in Our continuing to lineup XXX to the points of improvement take quarter the is clutter compared the competition. share quality basis grow traffic Steakburgers from Ultimate of from start of while quarter third beyond in how third XXXX. burgers and to over tasting, drive great daypart Having XXXX we helped breakfast business our dinner

about potential and gains. developed, burgers of popularity sales burger experienced driven drive integral by long-term the growth. business traffic. is share healthy quality this strategy of to-go and traffic sustainable drive an additional to platform This and the high very we've primarily IHOP's Given incremental the to we've is channel extremely part of that we're optimistic very our sales

you with provide details. Let me some

up the a XX% accounts for increased For grew to-go sales, X%, a year overall from By to-go and approximately XXXX. to-go the XX%. of comp and quarter, X% by Off-premise X% comparison, for solid by X% sales approximately third were traffic of respectively, comp ago. third traffic quarter now approximately and sales

first We over largest this much years over incremental partnership being strong restaurants national the next there midteens and XXX DoorDash. contribution. complement are confident in announced we the the delivery business we IHOP rollout our can DoorDash. to of with few To Currently, business, our to-go participating program grow already recently of with with this are

up have to restaurants the by the signed We year. approximately X,XXX end of expect

taken to and needs we they there's upside the influence to-go GrubHub we've decisions of and convenience guests. restaurants. Given major and delivery where such Switching address consumers' and options for our additional have the over how Amazon, greater business. To-go believe now our gears running of continued great platform a delivery rollout on partners steps with dine as national strategic our to

each our is It led dining is family to guests succeed. that experience casual ensure second satisfaction and for to driving has consecutive intent how satisfaction every overall traffic. for in and sales this to scores going Enticing of positive commitment focus IHOP for we're highest is visit the have the guests come an to to dining sustainable, having excellence vital operations extra and revisit to exceptional that back guest and all visit on absolute quarter. Focusing and

Additionally, I'm achieved amazing very not pleased only high highest have to do overall our that Congratulations team scores, we all also say score to September. franchisees and satisfaction we in an the time this accomplishment. members on

have operations the focus and We our clearly sharpened and on are aspects guests results. satisfaction excellence guest all of our tangible seeing

is net to XXXX. restaurant. opened our X,XXXth their in first open I'd briefly restaurants like domestic and XX other time open our development, IHOP's we Turning base. quarter new to net during at a another when when in industry pace restaurants months the franchisees that this history of in third nine IHOP opened year to in the healthy franchisees unit highlight mark no nine new will continue competitor the restaurants a growing milestone

Regarding international globally. IHOP development, for demand there is great

We are all it work domestically here global done to audience. bringing increasingly and the an being great leveraging

South we've XX Over globally past and the first to Mexico, alone, Ecuador. new bring signed America, months as Peru time, new in and in deals expanded restaurants, the that such the XXX the India. will, in franchisees our markets for And presence with last growing net XX months, continent, few Panama, Thailand new restaurants we've and to added a IHOP total bringing

as important continue which international growth view presence, for our we Dine to an We expand engine Brands. will

is enhancing development incremental atmosphere in of unit important to sustainable base and is appealing to experience. therefore new restaurants, traffic. from existing imaged restaurants and with Keeping relevant our driving positive revitalized the the guest and the as keeping visits conducive unit contemporary equally remodeling restaurants guests the to Just is significantly newly sales

program, Our XX XXX make the completing remodel the Rise great or on quarter. franchisees domestic in remodels third inception the franchisees have strides Shine of restaurants 'N nearly the XX% system. continue Since approximately remodeled the to program, of

run an remodels in of of completion. XXX this until range pace rate expect at continue to the the estimated per We program's XXX year to

we our card. allowing leader and and latest and of to and iteration The these Rise accuracy, by to table on removes overall guest Rise believe As to from the service that their come 'N all as we guests have restaurants, Southern have in experience The them and operational efficiency. you These to to in speed the from Other Shine new and of X.X progress initial New in-restaurant tablets, in enhance our drive believe technology guest wireless guest said, the IHOP. enhancing experience. dining the to technology device more improve in are guests Jersey. credit platforms which aspects a tool server our this this expect first overall ties the be 'N Guests real restaurants. with the exceptional our just these card remodel the sustainability the recently brand We with no of continue provide I improve devices includes brought on wait not and I earlier, quickly focus wait California said Shine sharpened convenience credit able friction in the accurate we a that and improves experience. experience introduction for category equipped differentiator dining. includes guests' the more speed. the their With We will pay never restaurants of restaurants will have opened in family update to satisfaction. and are technology test be learn experience give up to times will as

as We with up in sharing XX plans global our wrapped several conference. celebrating the and leader family our the franchisee with dining. franchisees days Lastly, we quarter spent future years for the

of years the Our to XX tackling excited passionate, turn for call I'll franchisees Steve? back that, over are next committed comments. closing about his and success. IHOP's With Steve the

Steve Joyce

Dine's you the to on excited we're so Well, great see making Darren. growth company. can Thanks, progress transition why we're about a

our can pleased be were performance. While recognize more positive and done that we third-quarter sustainable, with there's drive that results, we will to

advantage long-term Applebee's We accelerating further the two their of can to build our momentum on course in by We top-line our current that initiatives continue take on growth the the and driving differentiate will positioning on remain focused and brands. plans we categories. staying and respective gains are category-leading to confident share IHOP

that, Now to the for open call pleased Operator? be questions. I'd with

Operator

Instructions]. [Operator

Our first question comes from Stephen Anderson Please from Maxim go Group. ahead.

Stephen Anderson

kind would this that trying speak what a timetable wanted what -- program Steve of and take to the -- to roll loyalty about would and loyalty suggest Just form you out. in kind any kind to would what of -- you about of

Steve Joyce

looking do loyalty fanatics through to these actually we traditional Yes. system. and We're so two not what frequency to to We customers, the exploring Look, lots engagement of we're believe process digital have we're our We're a really will more is points-based the to we want looking What are The more alternatives program, we loyalty customers do what big frequency not it it's might to and more at about do loyalty that. for. is and drive formulating in going and program. so specific from for we're between level and drive to go we the how options our that. loyalty frequency, way, brands, that's a at what do need in of higher different so dialogue to a drive those to are more we and a drive raving is well, our from going increase that drive looking customers reaction two. looking with look that so of, engagement of involve normal

Stephen Anderson

to wanted something are concept. about evaluating for just you the a unrelated, third ask I where in And potential Okay.

Steve Joyce

enhanced in the very the that. obviously of the we of we so VFN. part level That's Yes, are engaged reason

some we're I'd So within of to is XX lots anything our be that. on probably We next months, we and able currently have evaluating in process potential brand goal but to talk a beginning track add have of to don't about, the to year imminent are the we're to dialogue. to say alternatives and do

Stephen Anderson

All you. right, thank

Operator

Our comes go from next ahead. question from Gallo Please CL Michael King.

Michael Gallo

that stepped-up are up of be a to ongoing making mentioned to drive that? should on you Or time? more level on an investing that move do you going much is we some think more from will higher remarks year? And a increased we Should number little kind your products. R&D about expect that a Steve, this as will in in bit prepared an how able to you When at investments -- over fruit innovation, of new think you're basis? bear be we that

Steve Joyce

dollars talk allocation have the is to Tom in relatively and expect level. investment term. of But -- to me terms let of the the what Yes, I'll the answer near

We are things. several that do going testing several different programs to are

reducing the is the with First friction consumer. points

place on pay to kitchen. within a the tablets about there move table, But the things looking servers; at table, restaurant, things your we're out restaurant like we're that in So to at launches the we're and ahead, next, we've roll device that call place hoping for obviously talked to year. in quickly device; the over past it, testing are on the you to can own your the order, order come meaning order being your able the to

engage a that with then or and own order server. it on timetable you or your or can add to change So, your own, on pay

do in to the the more trying guests restaurant give is we're the customer optionality. So what and

love with our folks Our engaging servers.

love we're engaging more way, think in going servers with our big give our to that's a what going to so but guests, and change customers do I don't optionality. Our is

In initiatives we're can detail in in labor to and been to we're what of really reduce using house money. to Darren talk that doing about at restaurants, and back the time well. working some that, in opportunities addition and and improve We've that's the got save margins technology the underway to look to to John several

are our margin environment, pretty As tough you know, in improving. a margins

with the bit the are the you side, John Every other communicate -- is in believe going them investments to And ability want a point about customer us. some and of do more. and efficient. talk customer, customer, to Darren, engagement believe a which we a about we the on restaurants? So remove we things the we've can friction of with going will digital time is information give it us a with make to to restaurants for involve more these our efforts individual got lot several your little we we that

Darren Rebelez

Darren. sure. Yes, is this Michael, Yes,

prepared from my Rise the As the friction we've 'N experience. points X.X, is Steve around I really mentioned the said, remarks, Shine what guest just launched removing in geared which

a list. allows guests wait And themselves wait-listing on the put process for to so, wait no

in particular. probably aware, are weekends waits you're As pretty on the on we significant

a the reduce have in to and the really guests really the give have those just security dwell responds server accuracy the guest the some and table at don't with also have allowing guest confident to up and have improved restaurant; waiting. they'll house need so really improve and at they that less operation. credit tablets the paying front when their And time for The help about helps And the predictability defection of cards. improve restaurant feeling to of and arrive be far table seated from that turns so are -- speed then efficiency

allows to as it with engage can then reach out guests basis gather a information, to we we to our addition more basis. them on In on and a that, more really digital us one-on-one

some brand. going can things John, got in of that the IHOP those Applebee's. you on So, we've on comment are the

John Cywinski

fronts financial from -- the as operational, -- financial Michael, we yes, perspective. three innovate a to, on guest, Steve alluded

taking great In at P&Ls, we've we both engaged PwC investments franchisees' kind as calls, place on prior looking guest our addition front, the XXXX. Darren of our late And on innovation the to and are myself we P&Ls. discussed, all

in same Certainly chain standpoint making one in both reduction expect from that are XXX a over in food year forward. and a our progress annually next years. in basis three and our That's We XXXX standpoint to Think supply meaningful moving the addition to the initiatives. have exceeded here two points labor target. of cost

Tom Song

Mike, this is Tom.

quickly real up your wrap question just with on me Let cost.

as here. with had XXXX, said geography for what some that, originally respect we shift talked about alluded is going investments. to IT to, in there exceeding be So Having don't we're I to we anticipate

As agile look -- lot as IT do. a use shops we of development, we

projects year some of goes G&A in capitalization were the expensed to being so And development -- current the go as from year. in the reprioritized, of that and cost, on, go CapEx

the And of only change in terms here. so the really numbers that's

Michael Gallo

question on Great. to-go. And John for I second have is the

XX% Because the where us that to-go start how the to yet. that, the at you least up the Thanks. mentioned sales couple are me see end you quarter, Applebee's at Applebee's of system and the that lot quarter, at ended didn't many still strikes next have think years? it the you going had quarter, of stores I where in the beginning remind the quarter. that delivery Can over even delivery you of have a

John Cywinski

That's accurate, somewhere Michael. An the approximate to on We're that the way XXX by in at restaurant between the moment X,XXX moment. at year-end. base

expect delivery emerging Our Catering catering. are is focus for next the our again, with franchise our partners years. category. four the the And of at three substantially components business: doubling remains business to-go. and It's an brand. reasonable incremental of And certainly to-go to-go, to off-premise there the opportunity within represents our on off-premise is business. the outperforming off-premise focus Delivery but three primary to Applebee's near-term primary the growth,

probably at growth is X Box. rate to Black times according category that run X CDR rate of Our the moment the to

we're So off-premise our We like our given variety, business. our locations, scale, number well-positioned our positioning. of value the

Michael Gallo

Great. Thanks.

Operator

next comes Please Vaccaro Raymond go from Brian James. from question Our ahead.

Brian Vaccaro

comps see positive I just Applebee's Obviously comp with quarter. John, sure touch correctly. heard to so it's the fourth Starting comps, Just I wanted in on. a make updated I encouraging the the heard topics the make to And wanted implying to guidance correctly. I just couple I very sure

You positive comps said remain that in October?

John Cywinski

momentum; Positive accurate. that's but, quantify yes, that, Brian, Correct. won't

Brian Vaccaro

and you million expense bad expense debt to but was one think. was $X expected bad quick Tom, Q I million, specifically. expense Applebee's around A I segment $X.X for Okay. $XX year-to-date think million the that down franchise on said year, income said line debt the think I your be

saw You debt. million in $X.X a reduction bad

two you help data square can those points? So

Tom Song

Yes.

third is isolation about So, one to thing think quarter. help in that the might

expense year. the So $X bad last decreased million period debt over to of compared same

-- $X.X for help? a period compared to million quarters as three three Does $XX the nearly quarters, first same the for so, decrease last first And so the year. we're talking million that of about

Brian Vaccaro

just So, in fourth Because you -- the -- include bad maybe million guess does but quarter? what expect $X bad What expense -- is chase. said we're guess debt I of for to so I still debt line that to that cut expense. the you imply

saying You're that--

Tom Song

in amount the fourth quarter. Real small

Brian Vaccaro

Okay.

not much expected? fourth the reported to impact in So expense franchise quarter

Tom Song

That's correct.

Brian Vaccaro

year, the guidance quickly all income morning the the to you Okay, That segment then impact right? that of updated franchise this for wanted right. units, acquisition not just And the XX does on confirm. of disclosed include

Steve Joyce

Does not.

Brian Vaccaro

little great. And to that on to million. topic, that noticed million $XX a one then over Okay, also I franchisees the increased loans $XX last from

impact And debt expense and bad your any confusion, you relates the on up to those Just income as can more statement provide royalty collections clear quarter? color to loans? current how it they also in reported

Tom Song

various about accounts, So the but the Brian. we have -- we doubtful don't forms that comment allowance talked franchisees, for on assistance we to of this provide

that you're And to. number mentioning so this that's what relates

the about plans individual past. think been We've up of good $XX.X million in these an so what allowances with is, some on of in this with that with franchisees these working So to individual have now was payment the franchisees process come of effectively converted. of we the worked allowance loans solutions otherwise aggregate there's part outstanding, so the on again,

Steve Joyce

But that upside in is Brian, those to fund in going, you cases, I to does the those way where to think represent about, which repay. us were is think

terms expectations certainty greater in of going have forward. We

Tom Song

the fund other that so the advertising there's that you an royalties, thing -- would upside as potential those upside one to represent loans Company, And well is to though as has so advertising remember potential an has both the fund. one then need of -- to them

Brian Vaccaro

Yes, you profitability. okay. improvement seeing today All franchisee mentioned you in those a the John, right, that's helpful. run stand on meaningful Applebee's where store rate margins ballpark Could basis?

John Cywinski

standpoint, the debt, more their model, cost given substantially in year our individual franchisees, so just stable substantially to stability just we better unit look their terms, Suffice brand a The address -- and and quantify so. resist the positioned didn't to is includes were reduction I payments. the that today that financial lease revenue versus say, are at if ago, their advertising Brian, on and the franchisee to given given their business from doing would royalty P&L, growth, their it economics.

Brian Vaccaro

store details margins? performance the or acquisition, you of terms on Okay. And then those the us XX in units, on can volumes units, per-store the sales purchase of expected this on of units a these or ballpark price give any

Steve Joyce

we're but premature so until that Yes, close. prepared really give on it's to Brian, transaction, detail we

on know, impact give forward. As it'll all agreements have will the segment, back capital of an again, It talking obviously close. as the requirements close that going you When about both information it not we the price are, And separate separately. including and we'll we'll be an what be indication CapEx. agreement, and you know, we have and share but reported I you a together so agreements will we're purchase

Brian Vaccaro

guidance you raised $XXX All the build understand that in you right, how costs could base one fair legal costs? recast G&A, of that much had on at teams year is nonrecurring level there for I are the you enough. G&A, million. us about and out line an as And maybe help think that give February, Day to a me, at Or personnel about us midpoint, of thinking but Analyst infrastructure, help on up the said just last line. that this you update that? back in understand -- the Can

Tom Song

some that mentioned already I Yes, the no, the projects. good question. of items reprioritization of one IT represented of

now, the the thought -- Some have G&A of development developed as of software run at these that the progresses, has team to prioritize being as expense. internally things year been of through beginning that decided the might year projects

of So that's a about third it.

third the mentioned. Another that incentive you is compensation had

to price, so comp. relates And That an pretty companies, public stock year-to-date as some you accrual. on of all the goes through stock incentive compensation incentive good that performance We've -- had know, requires price. with

the of you Something stuff, year some some on run through as then make of that if back earlier there legal good have you the you anticipated this thing. you to weren't some balance will that the It's expenses a that, outperformance. estimates in again, look beginning and the year, the finally, sometimes good are mentioned, year. necessarily And good

categories. main really and the G&A a third those are three each, on and They roughly, a uptick. are third, roughly third So, a the

Steve Joyce

the It's investment. additional to an as piece you personnel think characterized on So It's the related not. incentive comp. Brian, I

Brian Vaccaro

Okay.

Steve Joyce

be year. it will is every It what

So it well, the the team. so performed the has therefore up comp for is happened just incentive stock price

Brian Vaccaro

Understood.

very much. Thanks Okay.

Operator

over the comments. to call Steve closing I will for now Joyce turn

Steve Joyce

you your Great. for thank today. time Well, again

day. we XX, February you to scheduled sharing quarter are and on our speaking a report the We fourth with results then progress. look so Have further for great forward to

Operator

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

Dine Brands Global (DIN) 31 Oct 182018 Q3 Earnings call transcript