DIN - Earnings call transcript Q4 2021 | Dine Brands Global, Inc.

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Operator

00:02 Good day, and thank you for standing by. Welcome to the Q4 2021 Dine Brands Global, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today’s recorded. [Operator Investor like XX:XX today, the Director, I Instructions] to Ken would Executive speaker [Operator your now hand to conference Diptee, Relations. over go Please ahead.

Ken Diptee

remember welcome Good call. turn of CFO; Safe IHOP. Johns, conference by our John to XX:XX President joined John, call and Dine fourth over Applebee's; fiscal I'm Vance quarter CEO; Peyton, forward-looking I President of regarding XX:XX the information. Brands to John Cywinski, Before XXXX and Chang, please Harbor Jay morning, and

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

John Peyton

our a reminds of for the high. of its restaurant Vance, to XX:XX We're Thanks, same at guests Tale is me Ken, in intent and period of at at time back it’s both in return good the college. behalf and I of joining consumer read our us. and thanks Tailwinds that Two moment morning, headwind Wins, Jay and restaurants Two to everyone. case John, because tailwinds, In pandemic are time. a On a Cities, in Tale

meaningful ever is same being because headwinds, inflation, during incremental Ukraine. and macroeconomic played than largely steady that's and combating business at both said, time, now the country. supply years. back new past restrictions the largely across the rolled stronger off-premise defense offense are X Dine XX:XX XXXX, war Yet, chain we're disruption, the times we at labor shortage, in than and X more the That is holding and Our

tech, ways in in macroeconomic highlights accomplishments full about for I'll mid-December, momentum we COVID important us all again did simplification I'll frame-up business in in our I'll position and the another despite beginning stronger of XX:XX the recap investments I'll us and past Today than impact X QX made additional Our years challenges. our Omicron results. year in talk off-premise and Omicron in most solid the quarter. XXXX. menu late before. delivering QX. Yet, growth QX our which other our impact of XXXX. maintained And share ever of surprised Dine

including quarter’s begin consecutive I'll highlights, the sales second by the So, development. for the cash for EBITDA, comp quarter weekly surpassed XXXX. and Applebee's, sales, flow IHOP First, quarter for comparable both and sharing XX:XX average

year, last category to momentum consecutive quarters EBITDA million set, IHOP our franchise to of our $XXX.X to million, beat according and of while quarter, of comp For brands, consumer model the Box. the out sixth reflects revenue outperformed restaurants. Applebee's $XX its X recognized which Black commitment We its of X and returning

asset-light before XXXX, briefly an impressive, particularly dissipated. pivoting virus headwinds. Beginning those are net improvement Omicron in impact full and globally year, agitated XX ending and results our that's I'll are mid-February. and indication QX full franchisees that for largely the December an And million of from $XXX closed offense. restaurants So mid-December, new generated in months that's best brands and this our XXXX, time, certain traffic development performance adjusted from the opened XX our year Omicron in back to point address is XX:XX year. defense last At back since to free compared model the bouncing the now. For staffing XX, our macroeconomic considering of cash, challenges XX% and our

encouraged see beef, mean increasingly and programs, about capacity us. poultry, only past and from X moderate XXXX, the we've And availability of innovated Ukraine, define digital the now And years. of cost as restrictions in the Dine our restaurants. expect by to context I'll that the of at First, energy of communicating of on pricing the is they to our So experience. their Strength labor we're mass share end in proof examples how on that are made focus behind as beginning impact us in-restaurant long-term. is brands of of products, us increases mortar transition inflation ever are chain while stronger. in headwinds, XX:XX And X on guest years the in we the Despite remain And we're virus, I in-restaurant throughout we to of how emerging XX:XX the guests throughout I of the continue likely done these stronger brick and the terms, let what eggs. over strength closely situation and that think not it's stronger. to optimistic XX:XX has the the We than costs. cost important oils prefer. and we're supply number what innovation, endemic Today, And loyalty serving the about days that requirements, of all and technology, last we've phase when, following where light are pork to COVID. we're and the vaccination we

and enhanced Servers them of protocols waitlist and to Guests can provides our are a more. will tablets, follow new and with with the experience. put is XX:XX reason help packaging XX:XX it largely hygiene brand server is stronger XXXX. server properties new in changing business longer go earn we associated improves and second money. earn new. names delivery innovated their Applebee's more next be their technology house example, Applebee's to hot their our includes POS on For will off-premise Applebees.com, front IHOP standard. nurture projected system and that ihop.com, We're out now showcase integration and This of and boost X it's pay and back of bills and service. and kitchen are They also efficiency to IHOP's our we're and become new The tablet we've off-premise -- grow. [indiscernible] XXXX XXXX. management safety all guest a back takeout apps productivity, of their gen, service grew better which serving and with our and keeps and accommodate and throughout year and house and adoption, help versus rolling This The speed to house now servers because also supercharged POS we're the phones. food is is than to To times more year incremental investment throughout flipd.com new the volumes. designed higher menu intend mobile

faster Applebee's and either we financial finally, of us because focus annually and and by results approximately that brands And purposely John, geofencing introduce and growth for financial or example, franchisees. that which to Applebee's sources and will at proximity cost compared franchisees. performance at availability technology this streamlined market performance. strength our serves And our XX:XX the also has than scale analytics, identified more capacity technology, because appreciate benefit do coming X waste, and And Vance, plans And that, US at for our in and broadcast. continued some that and So Grand guests the restaurants times, to scale my significant of there's a our kitchens focused in new Applebee's Vance, third gain programs. even our improved we the our and on to Today, And abroad. example, expand on all new Xth comment remain. the markets, marketing Second, CRM model are Central digital its pass IHOP capital. we our For our procures world-class the platform XX:XX to minimal to value, do to I hand-off That's And Super Applebee's with Carside our March we're or and in experiences is also shorten invest us, stronger dynamics. delivering via the food extent our a streamlined importantly, via work are Wednesday, investment we're embraced innovation, And curbside to love mitigate Finally, in accomplishments. and New result, those and to uniquely in virtual goods a for Express is we over marketing same. and as vastly channels foundation markets best, Applebee's improved and for technology York implemented our allows are the digital dining enables our for [indiscernible] more more and are of helps will invest providing seating this our while menu forward importantly, operations times. Applebee's Day what IHOP. also our a providing guest food their launched track ghost revenue at Most and footprint marketing loyalty revenue XX:XX we've to great dined. online, by discuss us we're our consistency and delicious City during pre-COVID. menus services enjoyable $X because The to supply as next trust that outdoor billion efficient, with in expanded example, sharing kitchens in Investor of our to Cosmic dine, quality Westin and our our to and than test with (ph) purchasing Wings Jay our who brands asset-light uniquely franchisees. testing to safe. looking [Thrill-Cheese] morning do XX:XX our and franchisees prep IHOP our virtual incremental own. less that Analyst XXXX I'll IHOP franchisees XX:XX items us with sales and share, IHOP more chain co-op

Vance Chang

XX:XX Thank you, John.

start growth, our As John results. operating Then I'm positioned for of pleased provide well allocation recap our all of for I'll to financial and XXXX. a summary highlights. we're with mentioned, with a of I'll capital you share

traffic, for rent as for decline income million last quarter financial were the XXXX. increase for sales. an in by company me the fourth XXXX. level recovery of in G&A. the reflects Starting an of last a partially increase improvement for a for the well result in to our was significant Regarding as on percentage million, $XX.X The our in quarter were XX%, mainly compared the royalty fourth restaurant in EPS Franchise $XX.X on based $XX last Now which increase revenues, XX:XX variance offset performance to of the Rental was year. XX% average revenues, EPS same quarter quarter to with compared customer operations, $XXX.X domestic higher franchisees' fourth guidance same review little was to to business increased adjusted XX:XX provide our million, for were without of compared Adjusted favorable Finally, statement. the $XXX.X advertising XXXX. adjustments. income restaurant more And the quarter due the the And fourth was G&A for revenues profit, due franchise due that The retail detail I'll XX million, an of for to sales let was period primarily for over segment check. XX:XX sales increase mostly a same million revenues the the improvement rental quarter increased revenues the and This same quarter expenses. compared months. $XX.X gross year. $X.XX franchise higher $X.XX from million to

second expect our compensation [indiscernible] be on X, we X, half second G&A accrual; professional the expenses and to until shared for year, travel XXXX. As to number of higher X mainly higher due in to of call, half the and incentive QX of the relative the first half services 'XX Number things.

let's was $XX.X fourth million now XX% the G&A QX quarter last increase the to of to due to Approximately million, our EBITDA. So of compensation for was incentive Our accrual. compared $XX.X move year. XX:XX

$XX.X for change as all franchisee Cash We remaining and It's generated increases to$XX.X by performance The fees especially $XX compared of also XXXX XX:XX royalties, higher favorable G&A our was repaid adjusted The XXXX in to includes for was gross XXXX, XXXX XXXX. been EBITDA $XXX.X and CapEx primarily these revenue has to XX:XX guidance. Dine was total primarily was which million to advertising have Now XXXX. $XXX.X to of that payments get consolidated business, our expenses. to guidance. XXXX technology. offset higher It profit. lower our indication in cash a the sheet. deferrals partially for cash operations timing due XXXX. to had financial $XXX Consolidated of roughly deferred the CapEx was performance million, working free $XXX.X the of for by paid. led And improvements a and health billion, profit also XX:XX G&A This in was EBITDA For cash $XXX.X, of million note collection XXXX let's gross built $XX.X of million due strong expected in mainly compares important favorable This expenses into a of both balance adjusted balance both is to go impact improvement million for our our that compared increase XXst, in million was rent on to due higher was Now adjusted than to on half operations. we of this franchisees. flow. million December our of for from capital, from let's in XXXX. XXXX, favorably a in XXXX this flow course, compared in to to of than

$XXX.X the cash discipline our This maintain unrestricted financial We we're third compares total has of $XXX.X gives that us unrestricted fourth looking Our of the throughout quarter. cash favorably cash quarter of flexibility the million. to the us pandemic. at million end with helped ended for strong position,

improved ratio by also leverage churn. Our half a

Dine's share Dine. compared our the at since outlook quarter As X.XX leverage it represents you was of QX X.XX also to with XXXX. me This ratios times lowest fourth in XX:XX times of QX. inflation Let

industry. the just We restaurant continue to pressures, the impacted inflationary of like by be rest

across For we and year-over-year to be of brands inflation brands. the for moderation both on current quarter XXXX we looking north Based costs the commodity expect our for last conditions average fourth But this of compared year. XXXX, was inflation both of half ahead, approximately information, some in commodity in second to XX% on anticipate XX% year. available

of steady and in X.X% paid XXXX for returning improvement by As with continue capital do it to G&A XX% roughly to cash increases the Xth. fourth position share of a reminder, $X.X takes business or shareholders. about XX:XX our We unlock allocation, growth. resume we in commodity to our price aggregate menu us in January of create capital The CapEx approximately long-term per cover to X% returning inflation. million dividend on to investing We value our to $X.XX franchisees along shareholders. for that quarter Regarding capital, in

We year XX per weighted also $X.X repurchased million shares last average of XX,XXX in the $XX.XX for the price of at days approximately a share.

this in quarter remaining represented As from. on authorization. $XX stated QX that, grow December we million decisions $X.XX far quarterly approximately on that of made so X significant X, Number was healthy there for have our shareholders. build we to point year, last our the dividend to a And repurchase starting of XXst, current have

We program, guidance the February see disruptions share Board which Lastly, As quarterly are quarter our from XXXX. We was disruption peers. per an $XX other increase XXXX compensation to highlights will our is are believe in impact our details further see a to This current depreciation benefits approximately to The We us for complete out though the share. to of of the you landscape the financial approved fully of of to for COVID calendar have our those non-cash the long-term created to to cash financial closer million year. repurchase ourselves new XX:XX year, making technology, This Number the our investments of be approve issued position in X, growth, this on state. of performance getting position want Difficulty] for results, million. [Technical no authorizing in brands. even assumes repurchase will authorization is I can between share to company this our channels expenses for Dine development to may XXXX. $X.XX our upfront not approved and both enables the $XXX a million Dine its G&A due there still has investments XXXX, steady to QX. common in range gain XXXX, new XX% opportunity we the $XXX up for will first sustainable dividend than businesses an seen to release For including stock-based also approximately which execute year, for existing Omicron its today are further $XXX new business we guidance. expected million, the restaurant and from press plan, that XX:XX replace and stock. in investment review in revenue Please the market

Operator

XX:XX you. check cannot button. Please mute your Chang, hear Pardon me. we

Vance Chang

to range We between XX:XX unit net XX restaurants. development XX and projected domestic

development We and restaurants, Applebee's signifying expect plan, rationalization. and the newer net of X end between Applebee's portfolio unit XX

enthusiastic to about EBITDA provide will consolidated Cywinski, million, close, adjusted call generate to growth million our company Lastly, the $XXX and over execution The XX:XX Now, John? cash turn makes of free for consistently ability who business to XX:XX continued our restaurants John adjusted $XXX strategy year meaningful flow update segment us inclusive is has and between XXXX expected to To the improvement. I'll Applebee's. ahead. strong approximately demonstrated of and EBITDA. be

John Cywinski

you no one jump second, we million. me, reinstated where missed Vance. of Could you was XX in about because new could going that lost cover to put in. And about I'm hear -- There we saying you. that XX has section, the were technical a Hey, there you place you glitch. And for time company about was XX:XX $XXX that excuse just the [indiscernible] buyback seconds. the seconds, authorization understand just we one

Vance Chang

Sure. XX:XX

that stock. February approved highlight there guidance in business was The new the company I authorizing Board the $XXX which number COVID to common the from which further financial authorization for think its year, no million the review I was are to in the to our disruption Omicron up of repurchase X, will then to said, I due than our also will QX. this of plan, the approved assumes XXXX, And repurchase XXXX. impact new lastly, other the program replace performance existing of

John Peyton

XX:XX good. That's That's good. That's [indiscernible].

John Cywinski

right. XX:XX great both All Further your times. advance

for good for momentum Thanks year everyone. After in XX.X% baseline. X.X% XXXX year, in brand. increases versus So morning, QX Applebee's was XX.X% joining. exceptional the and pandemic an in last QX Applebee's XXXX briefly interrupted sales indeed QX the comp delivered our of in QX, of our

for with increase results weekly As final year weeks the representing consistent Omicron also ownership. Applebee's X% with restaurant the basis, a in sales best XX% our weekly representing Except performance comp plus range. impact was quite highest $XX,XXX, very quarters, 'XX versus posted to X.X%, sales volume X under QX were prior our of of performance the reflects XX:XX evident. year, sales This under when of Dine. Dine plus comp full 'XX, a sales On

only to company on portfolio XX pleased X XXXX, the record over that outperformed sales the basis also the to XXX comp by fronts, I results casual Black XX% Intelligence, the delivered and brand basis exception category with 'XX by an And partners. of of on sales note comp category among Applebee's according 'XX the ranking our 'XX, increase XX.X%. dining average 'XX While Applebee's points points. I'm a number an franchise year versus should Box increase posting a retained in of restaurant that XXX its year best XX:XX report multiple basis with consecutive last of weeks XX remarkable for the first also outperformed week our

remain remained more In menu overall brand convinced attributes, investments QX convenience QX $XX,XXX category for volume, the excellence, Applebee's front, such Applebee's point off-premise pre-pandemic core and the important Now, brand sales affordability, than of double our years difference XX% continued a Applebee's Dine, at the accounted on addition to delivery. go consisted continues very very total I'm rock past for awareness on variety, to operational and mix stable awareness. XX% a sales. and weekly to awareness, leverable fundamentals delivery few as competency as comp leadership of now sales, With restaurant, XX:XX XX% sales our per maintain brand. off-premise To XX% than of genuine ever over more Carside significant solid business that Go is the and

adding Columbia, several for In South thru in third one window, pickup throughout addition, drive our Carolina we more soon will be the with year. this plans

balance the past a XX:XX Although, John brands very the XXXX. with X small are QX follow X,XXX delivery on encouraging. Wings XX:XX preliminary Applebee's signifying the end a Wings, weeks GrubHub. we in DoorDash, this about restaurants now in addition started over market rationalization. of of growing lowest portfolio On to the front, our in as month. market restaurants our results the present At front, plan virtual completing We several sample delivery we the Cosmic years, by basis. are total XX Cosmic and closed size anticipate referenced closure DoorDash development That's on Now with expansion active on

pipeline, ghost units, last expect escalation achieve We with a marking moving we year. development number traditional I restaurants in XX:XX we our combination development of reestablished beginning to XXXX. unit and our the new In growth X of this new hope methodically of net in forward. double restaurant beginning to traditional opened new XXXX, addition, openings kitchen As

of As Applebee's US. XX,XXX XXXX, end restaurants of in had the the

and more than guests go labor Cheetos. with supply forward, Applebee's innovation thanking XXXX mix a our XXXX and and for Now, closed success. targeted from value And media with of surpassing designed a obvious based in total Applebee's second the XX,XXX total, To to competitive even work an national year chain with for with of position. As XX:XX last from XX:XX single February Applebee's PepsiCo be out I a neighborhood expertise represent Applebee's by dollar provided co-branded the applications year, we move National media we summarize, culinary, partnership In differentiators you address driving innovation advantage. loyal total, very as through by our and expect to this This to slightly healthy XX:XX reinforce continue sticking XX,XXX and years. last awareness from resale we the beverage, year. on throughout our messaging expect examples, XXXX occasion primary marketing on our ongoing our culmination executed challenges, very great of media absolute propositions brand. favorable over to day, the Looking year the Xth, represent perspective. the Day In just noteworthy muscle us several few secured to Hiring allocation kicked to can We tremendous help we'll along optimization strategic pandemic. featuring brand off leverage past

it partners. Applebee's of possible my on now to As I'm Jay turn franchise moving is glimpse the the mean, I that, our IHOP expected, of for Applebee's to very of proud what's our XXXX unlock positioned flourish sustained brand. provide basis. opportunity potential, a team, providing With forward. as an and a proud partner overview us I'll to full exceeding really XX:XX over to I'm well

Jay Johns

same of of quarter sales weekly each $XX,XXX Congratulations approximately improved Good another XXXX. on quarter. morning, month great Thanks, averaging XX:XX Average fourth unit with strong, Sales the remained John. per everyone. week, in the line quarter.

solid the affected There our impact and comp that isolated in were in fundamentals. IHOP's due change successful XXXX The rolling Addams' will most hugely Family, as variant surge with IHOP's X% not view a this fourth the in the adversely XXXX. we and declined promotion several XX:XX quarter, performance. include operating shortages, along Although labor mid-December, during window in hours the some Omicron [indiscernible] to standard was over which factors restaurants in strongest

opened supply. affect As holiday With XX% week a [indiscernible] Christmas The mismatch to Saturdays the our have by and restaurants in on very core greater percentage is XX% opened for on improved earlier, and menu point Year's said, remains Day which IHOP XX% fiscal advantageous previous with our mix that any quarter. XXXX that was or X XX/X, brands. both which Additionally, opened compared to week having COVID operating our to sales for day operating positive additional approximately for for place XX% QX, percentage on hours business, print labor domestic New could of dine-in are quarter. restaurants continues mentioned standard the that are our fourth is effect are of staffed operating fell a both holidays XX:XX standard approximately mismatched We for consistent and believe XX:XX are XX% hours at nationally. X our

our of this guest we build evolved fun will the program new steady, remained with stronger QX. strategy program the a earning visits. of adapt that business us. year. $X,XXX. QX off-premise incremental the loyalty It's allows redeem XX:XX true of by collect compares volume Our and this a one-to-one loyalty We will rewards XX% in approximately consumer quarter XXXX behavior believe brought burn to with for brand even our on changes for engagement, We've accounted XX:XX QX guests, off-premise be for drive by end our to launching sales program fourth sales and and our for way volumes our when sales securing of in they connections to appealing Average the dine pandemic. approximately This guests $X,XXX weekly to were XXXX. of enhance To be

updates our domestic virtual setting we As Lexington, Fortworth, through brick-and-mortar of to with incremental in Kentucky. day provide early needs brands restaurants expanding to our XX launched fourth not on a encouraging, virtual convenience and opportunity traditional started new the drive SKUs These new sales result, We're intentionally beyond lower breakfast our Ballast part require development. providing compete some of X out grow results brands, existing to across minimal our look presence are and this require to cost virtual meet restaurants, we capital sales beta In approximately XX:XX Turning quarter, locations, brands with flexible to an our equipment a extend forward options X our recently plans and in which XX:XX the guests The business, and lower progress. Phoenix restaurants. requirements. about to test execute. do enthusiastic

capacity opened globally franchisees in in development which to which more non-traditional, of traditional, second include square is through New XX feet XX:XX unit on X prototype a which is formats, ability City, December in confident year. details our all X,XXX growth small seating XX unit domestic our opened XXXX, our and [indiscernible] We flip of restaurants continue [indiscernible]. expand and new later the in We'll our Our flips openings. the York significantly location provide to approximately XX seats. We in IHOP, about were remain

In our outside also in focusing franchisee addition opportunities the Caribbean. key our first domestic We deal presence, recently to growing on US. announced we're the

The Limited, [indiscernible] open first agreement late IHOP is through scheduled next several with in to Bahamas restaurants over IHOP XX and the an for which XXXX Bahamas location in years. calls opening

Additionally, in IHOP we restaurant the announced deal to a and the UAE. franchise US, IHOP in status within develop both Applebee's

in brands. with Ghost kitchen IHOP's also Kitchen the in America ghost We partnership have North first

our to launching comparable highly XXX of marketing crafted approach I'd the the We in very We are off-premise what hand quarters according opened dine-in. average by guests resources flip of wrap in accomplished that strong Toronto Our in-restaurant members omni-channel consumers To array XX:XX to an outperformed make franchisees by XXXX, consumption. we've our menu first for proud relative XX:XX to selection melts. Black QX adapted in restaurants, and of business wide portable category guests basis of We to maintained our XXXX. our X Box including QX a [indiscernible] the even Intelligence. in of return our changes items by behavior all better points to and up, I'm IHOP valuable their like as to thank portable XX items our elevated happen. and We contributions for off-premise franchise new team to such applications. as new utilize an

about Looking and presence ahead, unit growth potential expanding through I'm vehicles. virtual our strong optimistic a

over of will COVID-XX to pre-pandemic new optimistic John I'll turn call to started his cases staffing John? back we're now Lastly, XX:XX closing that comments. return levels. the to Peyton for and decline

John Peyton

Applebee's. before And some and to closing questions. think quarter we it. Jay. Great for comments, have Thanks, I Thanks. XX:XX both take we're IHOP going Appreciate

Operator

line Deutsche [Operator Our Mullan from question first the Instructions] XX:XX of from Bank. Brian comes

Your line open. now is

Brian Mullan

XX:XX you. Hey, thank

reference the guidance. appreciate understand the brand guiding I But you're helpful the assumptions would lead either or to the by EBITDA that think high that top I sales can the in might line to underlying be of not end Just XXXX one today. on low guidance. to same-store end it

like you'd that underlying know helpful, any in assumptions relation about sales talk would Or to that revenue people weekly ways average would to XXXX? making? the that either However, that you're help other be

John Peyton

XX:XX Thanks, Brian.

of think but comp, on guidance guiding some after the, for comp expansion I it channels. over not XXXX, an we're beyond working are goes margin into out, that and realized, pointed are reflects will that still initiatives what -- us. from revenue new you initiatives the development our these we're say, on is time As There's growth investment growth, but year happen

beyond that's focus us, QX, behind forward. are So going on specifically not so that, restaurant for sort comp it's we anything having mostly growth-based we're performance. seeing again, Omicron our guiding why of But, said

Brian Mullan

XX:XX Jay, you. that the of on if were XX/X in And locations quarter a third heard just right, pared the much percentage didn't It Okay, you like question sounds IHOP. change I the to quarter, remarks. from in then fourth thank the

So topic franchisee I how as restored. to just your What want thinking fully you that now? the get those conversations could us current update on you if on right going? are wondering franchisor, And imagine today? is perspective that a

Jay Johns

can't get is I'm the you give the to will just confident an to pre-pandemic Well, I exactly be. XX:XX we'll that answer Clearly, waning. back pandemic but level, when

improving is staffing back percent is improved it sit in quarters X the as today. say, hours as X%, full and heard operating that we're we that standard right think me now slowly, more to you improved getting I

show. our they for, getting slowly way typically then we hours, once the franchisees And do what of So even more I it the XX/X XX/X. to is that will they kind of don't first hours we standard if start And better. move the franchisees full historically standard say, on and this more. restaurant operating start you'll The opening think that they'll new start have business, to call get open,

they'll expect I that would [indiscernible]. staffed. can just get build begin go slowly And hours as to a way So And that with. they weekend, on they XX

Brian Mullan

you. Thank XX:XX

John Peyton

may What what staffed even XX%, franchisees the X the little ended as based we we're And saying that first better. XX:XX national our in -- Peyton. bit we're needed. QX now we a that it's versus was the from now year XX% hearing upon Brian, first you all quarter quarter this were canvasing approaching we last of quarters, that basis, I'll on recall, a were John add QX, franchisees, year, about last is

in seeing stalling So nationally after we year. an are last improvement staffing

Brian Mullan

very XX:XX much. you Understood. Thank

Operator

XX:XX Thank you.

comes Truist from of Our next Securities. the Corrigan Jack question line from

open. now is line Your

Jack Corrigan

in 'XX quantify for and also guidance And drivers that you savings might found detail maybe guys. the the 'XX. first ease on 'XX question that that, My permanent if Good and the XX:XX in Thanks the G&A is just unique little any within of could going that? And give of morning, is questions. then forward? you you pandemic? more during a anything level on taking for Can

John Peyton

XX:XX their it Hey, high and for and Vance will in 'XX, G&A this or it then to the they're we G&A, whether is do the technology over year be that year technology, consumer-facing and it's on invest when back-of-house on Jack, pay comes investments ambitious a long-term, But specific are for it's technology, we them I'll and phones. little of these that next now got enter we XX:XX John. we the of turn I'll One in think able our things to is, over permanent we take to believe level, numbers. it to front-of-house, all bit second guests a increase a as at as right we've restaurant-based my want or in, a our not are there off and to year couple plans to want well more certainly there's investments but necessary XXXX.

We also plans have an ambitious there.

tech the also And and program making unit we that we're sort that? other specifically began of in XXXX loyalty some data we off a last the accelerating growth, repeat pay in year our Vance, you think certainly long-term. can XX:XX We're there's investing that over investment behind will So things like that.

Vance Chang

XX:XX Yeah.

support in that John different I in technology but talked to departments to just expenses, the on this and I we expected growth ultimately, from and designed and Investor But is into development-related be do different operations over the last one next increase to in for earlier growth in. brand. mention I'll do of pursue think beyond XX:XX revenue investing and consumer potential we'll projects improve this level G&A are our guess, about support investments G&A another and as and the mentioned margin Day XXXX plan have product now, that do and of that, the support primarily travel thing open that unit earlier, XXXX we we cover development appropriate of We related new that anticipate that’s costs. in expansion And currently guidance to year. time for big initiatives what more channels we're were I we built experience reflects see week. unlock We'll of really franchisees our need XXXX, growth, not at development infrastructure still positions guidance. also research planned as our result the XXXX, comp a guest

Jack Corrigan

that is That's your health was in XXXX plus about what color. really materially talk do And XXXX? Thanks. you the franchisees. franchisee versus the on expect maybe, second profitability question Great. my XX% comments inflation, really to given helpful then And And in you your pre-COVID? of you store could pressured expect be level XX:XX that

Vance Chang

I'll on XX:XX inflation Well, first. the point comment

for mentioned we're first the automation versus expecting year think for the the in X.X% I of with XX% or average in inflation IHOP half my As specifically remarks, north and year, second more Applebee's for of for year about some the this prepared I XX% the half.

best that the based again. can development our that see health -- the deferral explain Our all -- is been we financial franchisees for the fact repaid. on again, our And of interesting way are they're very we franchisees has -- I development think growth

franchisee a specifically. also historically reflection franchisees. but of we confidence the that's then So And disclosed -- our haven't relative information from financial

John Cywinski

is inflation, and this back respect year my I very they're John point And health would to is forward. Jack, going with Applebee's Cywinski. then a view had here year. a XX:XX better second X covering smart share they'll clearly, strategic, franchisee state on time. They at and in this tenure terrific pricing. coming than then opportunity financial I And market very be a responsible as any

Jack Corrigan

Thank you. Great. XX:XX

Operator

Thank XX:XX you.

comes question of the line Our from Nick next Wedbush. Setyan from

now is line Your open.

Nick Setyan

a a solid new sneak your step-up give a Maybe And we you're possible? longer-term it's a But G&A. going that's is EBITDA on because Congrats guidance, year in and big beyond down investment, EBITDA you. growth of QX. of around think Thank obviously, can bit XXXX, of concern, I you if XX:XX us the a have a understanding peak expectation year-over-year.

Vance Chang

this XX:XX Hi Vance. Nick, is

of reason investments will initiatives XXXX of on is, investment for We this Day. year upfront while time. year-over-year making an the lot said that is over cover the our of the you a in more sort benefits margin Investor business us. is are why But the because down happening these we're And going

we we in think XXXX this timing year more think we it's aggressive beyond year run -- a our a rate is be is which business, And of mismatch. how So is reflective that up longer-term the think and is for few more to future we But about the sustainable program have growth. time, as same shareholders years, the of for setting the very next plan capital return for our healthy a business well. at ourselves of

take approach to that trying think we we're balanced more with how our capital. So about

Nick Setyan

you XX:XX purchased Understood. shares Have year-to-date? any

Vance Chang

of late an obviously have and capital this up our to continue time. $XXX million previously overall program announced We we year, program last we we year. per that's And program in that new repurchase share XX:XX active part strategy to and in return repurchase increase do to QX initiated and so. do over the our earnings a coming of will continue fact, It's be, part our of approved, we'll so that share big

Nick Setyan

to that about you're will as you the across think progresses, price about? Do system, inflation higher talked Okay. X% XX:XX then the you be just menu if understood that correctly. X.X% given And guys the talking I year

John Cywinski

XX:XX Hey, to a Nick. with don't if John respect is Applebee's. this know environment. I Cywinski here, fluid

market overreach It forecast as in this franchise part. very some share hard don't and conservative to pricing moderation at this As partners tend an point in be to at would a on opportunity. their pricing. in viewing be I see that disciplined I said, see point. and strategic I our

Nick Setyan

Thank XX:XX you.

Operator

XX:XX Thank you.

KeyBanc Capital. Gonzalez from comes question line the next of Our Eric from

open. now is line Your

Eric Gonzalez

can XX:XX planning type on about wondering of some that fees charged to there Hey. of technology I of CapEx of franchisees way maybe to side follow G&A investments. up in you're I'm future? investment or it. terms any in a transaction the even fee the Is and If the that recoup the

John Peyton

John Peyton. answer Yeah. Eric. that. a franchisor no. tech is take as that The is platform built. XX:XX I'll we It's that Hey, the we value The add

investments franchisees. and the cost speaking, are it as roll fees we Dine, their out make IHOP platform are maintenance their tech. once annual ours the can in and part the And service is the because of the So and of in own more generally which we building this our -- cost of value proposition, both view part to tech when could investments on on brands behalf. and it for comes either we are we do do And Applebee's brand

Eric Gonzalez

might the maybe Fair and for much visibility XX%, Okay. year you locked XX%. you slightly I in on XX:XX commentary, than Can what that maybe think have you how in that on to prior enough. how compares then said you years? have higher comment the And inflation

Vance Chang

was year, don't XX:XX about control We Applebee's for the franchisees. for So think X% for menu to and on close inflation we saw what IHOP. pricing I XXXX, point, our prior X% in

do on their own. so franchisees Our

fluid a situation. it's so, And

give think X.X% is best remarks, can was menu I to XX% inflation the prepared X% covers cost. I increase -- example is of my in pricing of which about

look at our we franchisees we'll going disciplined -- math pricing forward. aware then approach to take and So very increases a the will are of it menu

John Cywinski

would both navigate scale. are brands argue our well John given an inflationary I positioned to XX:XX Cywinski. environment extraordinarily Eric, is this just

Eric Gonzalez

Thanks. right. All XX:XX

Operator

Thank XX:XX you.

Jeffrey next Barclays. comes Our of Bernstein from the from question line

line Your is open. now

Jeffrey Bernstein

XX:XX Great. much. very Thank you

X% about to math XX% the that's basket I takes inflation. Clearly, the on First, what of I just wanted price. guess, follow X.X% last that to to mitigate, it comment up

like each wondering quarter strategic. in Just what own to cautious being like terms and disciplined decisions. is? if their I what's 'XX make actual they're you you'd said, that But brand? hear get to perhaps first the the of And in franchisees the know pricing encouraged for share looking pricing of the

John Peyton

Hey, Peyton. John it's Yeah. XX:XX Jeff,

what of Let X% But the half, behalf raise jump can in franchisees is, you can year, we seen it haven't was year. is, in prices yet a typically tell me sort brands. tell -- and on brands particularly we you What back both this of in X% we for both to to Last just QX year. X% X%.

So had or historically they what basis so, XXX they done. did increased points

important is that particularly rope our right as customers, independently probably And year. into that they well are you that, on of labor And maintaining can you value important and math of balancing of inflation the are they while also as of then cost brands and And our thing covers us, environment. protecting are -- Vance the goods their aligned a a pricing inflation. It XX:XX costs so gives the when now. the gives this as at this value they it last tight in of sense bit result of that's for make XX% as X.X% brands, increase least just a their increase best decisions mind our covering keep of margins as that's in their to built in between franchisees both bit mathematically a well

Jeffrey Bernstein

the like 'XX. spend CapEx spend, what CapEx incremental in questions or the One, that's usage. roughly business? And a then guidance side the Understood. the versus a company increase I'm related to of couple some of of get just gauge the trying Just 'XX? just XX:XX to in of just wondering components the for are it guidance? the is for the to double components on cash Whether looks operated technology it biggest

John Peyton

that's XX:XX question Yeah, for Vance components. through the a to good walk

Vance Chang

on spending improve and there money probably guest loyalty restaurants. that's XX:XX That's on for on-premise infrastructure. investment And is program, our key to piece. Yeah. areas on CRM CapEx then operational The bigger a off-premise technology We're the company-owned efficiency. piece is and experience

Jeffrey Bernstein

beyond know lowest as lastly, cash you to since think just leverage, And your XXXX. relates is I it it. you I Got mentioned XX:XX CapEx. the usage said it

the is outlook a that I'm wondering as for your I with specifically, you raised know So backdrop, what And just dividend. that?

little a share got You repurchase.

this expect is quarter dividend now dividend? or steady-state established or initial whether point, we whether go think the was upside that should dividend wondering ago further the know more there's Just the of I starting more X normal this you kind a up. you was a to on bump

get for to priority? a return leverage you. and trying your is Thank cash, again view your Just of which gauge the

Vance Chang

XX:XX Sure.

do have about increased seeing this now, We We but calculation. over on that an pandemic strategy a we next utilization. right quarter. specifically, evaluate and very on we technology the and just in our to we for million our before, increase new have dividend this we appropriate. one, just to peers, yield, based It we further or approach lastly, talked as leverage two, then in our capital to mention supply shareholders. address did cash share program dividends said; the time. dividends flexibility inflation we're plans X% returning yield to the capital We used stock last And to objective repurchases, making So right? believe have to And to that we've is relative business over started. is is any M&A by that on: uncertainty disciplined balance chain depending said $XXX our maintaining currently our attractive is opportunity. X% this fourth quarters strategic is from we XX% issues the financial allocation sure remaining our investment And On labor, this few any cash level price we about

our your strategy the to Our XX:XX going Hope are on time. answers and our repurchases be and that to of question? overall trading. of over based value be view where things increase opportunistic just part company's But per share will level of annual intrinsic earnings also it's our a

Jeffrey Bernstein

XX:XX Yeah. It did.

John Peyton

John just I'll Jeff, And put a bit a can. it's little that, I of on if Peyton. XX:XX bow

years implied over the of accumulating had not the certainly sit knowing million then we the $XXX-plus bring. cash future is, as recovery -- sure is you the we on is balance that last the industry what's the this make in question long-term. We that And moment would that we anticipated. is, to year, think much cash what what know, happens quickly to to during answer X the the crisis a And no, were more needed, than in we I intend just time. the

year year So last as we had a well. good

looking quarters that how to So take as Vance work but very couple we over said, to we're balance. holistic, the now of approach cash balanced with next a

Jeffrey Bernstein

seeing Great. Look to week. XX:XX forward you next

Operator

XX:XX Thank you.

MKM the Brett Our of next from comes Levy Partners. from line question

Your line is now open.

Brett Levy

investments. on XX:XX Great. taking Thank kind of about we can that about the discussed, How also savings you see guess, to some off-premise? of building my for of Jeff's some especially we it's think question. I contributions and labor could kind from tech what and initiatives your Thank of it investments, relates and just what should as you there, or drivers think on the as these from initiatives we you question see whether you.

Vance Chang

make have better interest to obviously -- health initiatives the labor are that sure franchisee we The the XX:XX will and impact taken of franchisees care we're financials, of. our

happen result will [indiscernible] that ghost Comp You probably the will plans investments throughout virtual won't will the over on the in will continue time, that But financials. and Dine's see of working happen year. and the continue. we're kitchens

mentioned will earlier, just guidance -- investments expected of XX:XX up growth that that's So again, come of of the from over XX and year calendar months next hopefully to XX where as the in growth time. the making result the XXXX of months. fact is because the upfront then course investment I looks our we're the in happening think, the start I the

company. come brands detailed 'XX we're plan beyond over more you a from Day. one please sense get of of details few do So We'll on for to our into Investor a next that the each what also have get the our on the shooting targets and more years. And we'll

John Peyton

benefit to it's certainly to obviously at grow top our with the that meant cost efficiency. on to XX:XX restaurant making like helps at going franchisee was things. business, more John help that technology add X The do revenue. grow franchise And it's the Dine line. level, level is their front-of-house Brett, us Peyton. franchisees Vance clear which back-of-house I'd and is helping We're the by to and

helps even to apps on that loyalty franchisees, making to faster. investment efficient. the Also to soon got traffic benefits to we're handhelds announced minute in and believe, in technology to, when And making, business revenue the us they've makes table So benefits weights support we program example, is drive more for be that going for grow us. The That we're for servers, increases off-premise us. which the as which IHOP's nurture IHOP, and well. restaurants example, benefits turn XX weekends investment

So the technology the Dine, benefits as as franchisees. well

Brett Levy

you. Thank XX:XX

Operator

XX:XX Thank you.

Benchmark. Our next line question comes the from of Brooks Todd from the

is Your now line open.

Todd Brooks

XX:XX Hey, all, back. morning, good want go everybody. to, just of I first

cut you a to. I think in the reset it John, call different where out than spot maybe,

here? $XXX didn't here talking For to the And that, of G&A, into call us XX to out soon I the take transcript as if next you about were seconds to that as a second cut $XXX on this gone and Vance know the it then started after million get million. wanted

Vance Chang

XX:XX Yeah.

pushed $XX XX:XX was and related our investments million, G&A G&A inclusive $XX that business said, in some was reflects that to I includes we're XXXX the the million, comment $XX between earlier. the we So, I on company CapEx, million million, restaurant the I segment. and is to was depreciation $XXX $XXX and expecting including stock-based that made G&A. range million. G&A raise the to discussed from of mentioned And of approximately then also spend And XXXX. additional that saying I That is non-cash comp projection

restaurants. XX We we unit to development development and XX projected further rationalization. and plan the of years, range prior at to between with net X domestic upside signifying compared unit XX Applebee's for end expect newer And IHOP restaurants to net development Applebee's expect between

Todd Brooks

it. component 'XX of Vance. had slid Appreciate evaluating. 'XX for QX this able weren't us as the kind you out Thanks, you that that we're spend Great. and Can is to but of amount into quantify what to? intended Maybe Okay. XX:XX jump the of year, that

Vance Chang

XXXX form XXXX and fill departments it and it different make It's up amount, product and that does development -- pursuing XX:XX in material projects expenses positions is open of and guidance. not is that are some but the a travel consumer research still

Todd Brooks

I Okay, the know you think, Cosmic And the in QX. platform second then I rollout, XX:XX great. Wings, to on John, spoke on

will across So be after and thoughts I the just this? completed? sure Cosmic layer you'll presence share type could week X I'm that's guess, what when of platforms on sales the details be And for more next what

John Cywinski

in tough on -- to the it started -- the last about we Good because really The Todd. gauge we in I time, Uber at Sure, on it's morning. this year. I had prior a we Cosmic We this so [indiscernible]. Think front, a with interruption XX:XX couldn't and Wings think with supply deployments put wings point of February, way. call, Uber referenced March had

we now the will largest to -- over the delivery are GrubHub. currently provider follow with DoorDash. next We expanding month then or provider, And so

weekly potential of our right? X terms that, -- so Cosmic -- at average very Wings at QX, clear the honestly, a investor call At incremental of conference as all the we'll And by impact we on of largest time to the in have business, point, delivery that into get full incremental full too we it's will because next providers. view have our across sales sustained just investor quantify early, and I'll the week. quite deployment

Todd Brooks

customer Can to enough. of we gains Fair question. from see again walk the see And quick bit little Thank benefit loyalty just hitting points? in program, you. start IHOP? Okay. how when we should And a revenue whatever the XX:XX loyalty through you then, timing on structure the would Jay, a maybe

Jay Johns

like we Todd. this QX. probably get Thanks, that XX:XX should launched said, The Yeah. should -- program you

month basically, right. end this So at of the

I on able to a I to So we're it's well kind call being as next launched to details firm with week as be and that of close right. earning some been hope program, share specifics. you very said, But more

You earn the rewards by spending right. money,

So it's pure just program, a not discounting right.

for probably driving food. other traffic, cetera. the people sales, ability XX:XX items, do spend there et et will chances than things actually for And to be other actually them cetera, for to to earn just to redeem some You're that money food

to special with programs opportunity be vendors, to that. more to et able cetera, are able do they might might to think have do for we the where experience-based get We what sometimes reward they be and

on to think guest other it's them at expand behavior. time with and way for to going really say we come come details program. in can But engage unique, guests I So we very the about excited the more be going this. so breakfast our will a our day, our lot also are think, to I to to get going be And the fans, it's And segments. drive at a we It's really of believe, to help us to dayparts. base another us

Todd Brooks

you Look seeing XX:XX Take Okay, perfect. all to care. forward next week.

Vance Chang

you. Thank XX:XX

Operator

XX:XX Thank you.

comes next James. line from Vaccaro Brian from of Raymond question Our the

line open. is now Your

Brian Vaccaro

to store and co-investments the helping for about could clarify, way good Thinking morning. ballpark increase and Thanks, I increase or any does to of also, infrastructure there equipment? just the call you at And it, CapEx pay corporate investments to sort related hoping new in growth to a each, POS new the the XX:XX of include be incentives guidance. to G&A it is level, unit back it other the is whether was how franchisees? much direct versus,

Vance Chang

XX:XX Thanks, Brian.

that, the licensing incentive the They way does the out ongoing for the will co-investment, guidance part franchisees part. the we're So and -- is question the technology. But it's working infrastructure include pay on typically to with in program. fee of the we invest then your CapEx not our maintenance,

So or it's not that but paying hardware tablets the POS the from we're perspective, the necessarily co-investment for themselves. hardware the costs,

Brian Vaccaro

G&A 'XX there That's in XX:XX clear. one-timer normal spend level this about where investments a we're be that's are million expected clarify 'XX, Or helpful. you to just in forward? And new and $XXX expected Okay. new from 'XX, could of that? level so I'm Did Can range, that dollars to million say going talking you $XXX this just decline in beyond?

Vance Chang

that increase I we what The is -- I expect forward. projects said G&A another we're increase services in What I don't do. Yeah. going mix a XX:XX looking think that of to we people was, hired,

forward. the to set outpace growth XXXX growth our unlock it's achieve. we see we we and investments will the more I -- will margin for going so And for that think and and happen that beyond. sense in can Overall, goals expansion Numbers revenue G&A the think ourselves growth then that infrastructure will you our make that

Brian Vaccaro

XX:XX Okay.

And increase included was your help comparison of have comp the incentive related, just how more million. and the set or you much you that to can you how versus it G&A. was quick quarter, Is I us year? level in my that maybe incentive incentive $X we think representative it Just was to into up $X comp million math of Is comp million -- much it, $X is help a the XXXX? an heard comment piece should fourth in in said was incentive how The of outsized I XXXX? set down normal G&A if $X might to 'XX? sorry, go Can higher million just level just that X on frame much on been up that? right, expect comp

Vance Chang

comp What have incentive that happens you in 'XX up level G&A to should we have in we 'XX. repeat cut the and 'XX. at Yeah, make to we is, do of that definitely not XXXX XX:XX expect same catch-up of

offsets in comp that roughly sort the experienced higher catch-up of the So 'XX. we incentive the

Brian Vaccaro

-- XX:XX Okay. And Great. just

Vance Chang

XX:XX said think incentive Just to I expect clarify, comp. we shouldn't I

that exceptional think the the was year. of made an this company, performance I wasn't point on XXXX

So the [indiscernible] that was

Brian Vaccaro

XX:XX Correct. Understood.

could one stock-based guidance clarify, Sorry, you includes last comp of G&A said help on The me that you $XX D&A and hopefully. million.

accounting when I $XX been $XX driving to there? how difference you're any that and Is comp defining there guided for the difference? Can you Or stock historically, million. think help G&A, help million that? some company what's component has or has that that in understand D&A

Vance Chang

of compact of versus for the work part plan terms doing we're company estimates was kind other I no changes of in strategic well. there's us type into it as in restaurants think year. goes of sort big or how the of out it than XX:XX for restaurants. There's investments the stock-based And corporate math for

Brian Vaccaro

too, terms then of leverage I that targets, at you moving just lower when differ a sorry. existing about is EBITDA? expire they And know remind through wanted 'XX? to what one, that And I some in leverage. of debt your to Do from refi sheet your Okay. is on the last sort opportunity than whole to And ask the does times in leverage? could historical XX:XX then balance little X you're the -- Vance, pint now. all make us, And just This notes? there at company's are an

Vance Chang

XX:XX Yes.

and the refi talk point leverage point. hit I'll me Let the

quick at of in XXX XXXX bond callable XXXX. our bonds reminder, and So June our XXXX a [indiscernible] becomes

window option. have We the call year X us a for to exercise

XX:XX peers overextending this process. of refinanced So our securitization times level. in the the we our business option whole then right. mid- DSCR market high And CDR our and And think happy favor terms X call in highly year. without work and mentioned between the will market us. Xs long is at very for X.X is businesses this is do as And structure. a right in And franchise we're right our our those low are is It's We affordable only we is it before, it the in We relatively not -- now, to market We leverage. rate the short securitization level on closely. have volatile monitor Xs we'll benefit the our peers are in not don't but nicely. the from covered to But so.

a will good in over naturally delever we but EBITDA grows, really where and as we're we're are. really time obviously, with So position, happy we

Operator

time, showing John I'm call the XX:XX like this Peyton no Thank to At back to further would I questions, turn for you. remarks. over closing

John Peyton

management the today franchisees today. much. quarter. our country, I'll for team to team forward. Thanks everybody, thank tell we're And another all on and Thanks, to of hard across you the XX:XX our joining work our you, members deliver to so and their Big for call strong looking call our

our entire of also Applebee's sharing the Investor and with lunch so members community. Our IHOP I week. telling our look in be of have story with you leadership our leaders well. New spending you of for you some City Conference time about there. We'll breakfast will some the from York future come team franchisee cuisine, and to and have next at New in York Board as We'll forward best our

very to thanks look forward seeing So and much, you week. next

Operator

for conference call. Thank today's you XX:XX participating. This concludes

now You may disconnect.

Dine Brands Global (DIN) 2 Mar 222021 Q4 Earnings call transcript