DIN - Earnings call transcript Q1 2022 | Dine Brands Global, Inc.

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Operator

Good afternoon, everyone, and welcome to eHealth Inc (sic) [Dine Brands Global] Conference Call to discuss the Company's First Quarter 2022 Financial Results. [Operator Instructions] It is now my pleasure to turn the floor over to Eli Newbrun-Mintz, Investor Relations Manager. Please go ahead.

Eli Newbrun-Mintz

Good morning, and welcome to Dine Brands' first quarter conference call. I'm joined by John Peyton, CEO; Vance Chang, CFO; Jay Johns, President of IHOP; and John Cywinski, President of Applebee's.

call forward-looking John, information. the safe remember turn regarding harbor I over please to our Before

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

will sales XXXX that, XXXX. With call relative turn John. comp no the longer or I'll over to to We disclose

John Peyton

way leadership cover our This year. to see results environment, plan feedback the now challenging Thanks, Ken, John, so joining and and earnings And Investor We're initiatives on so strength our team quarter we've for you bold execution and the our macroeconomic on is of Day investments for of that our That's paying On QX. you and key I'm in smart our everyone. to our are aligned. environment. for rest this with the the March. the many quarter growth I'll innovation. the thanks a glad much, thanks off. call. accomplishing and good of in our first was strong that's and for our because behalf morning, us perspective QX our especially Vance, focus quarter based could Jay results, morning, great heard choices attend on turning in And and

an as We headwinds last operate tailwinds, of quarter. continue in and to described environment I

During the on-premise positive quarter, to sales IHOP and both sales recover. comp and volume posted continues Applebee's

tailwind. And that a off-premise so prices inflation in or see remains decline significant business a it for last or didn't quarter. traffic due customer We behavior now to appears gas

We continue to from effect benefit the for year-to-date customer the average to We inflation CPI of home. closely CPI continues fact that monitor food for environment macroeconomic food the inflation from at behavior. home trail away on

in in IHOP is so are dining because segment. and strongly And brands a favorable this with world for options, both Applebee's positioned many the value

Nationwide, are accelerated all remains recruiting XXXX understaffed disruptions, achieving the hours same upside due food of to labor supply, and about Finally, hours war in and when time, an persists, to of fuel in Ukraine. all supply restaurants from hours to capacity. XX% full of operations. inflation, staffing restaurants can able full the table remain by still challenges chain At turns. labor slow headwinds return This operations prevents

that technologies franchisees while we're front guest labor address and also experience. house so back working with the test of enhancing And to productivity

systems, of first X- already cross-functional time, team And XX% assembled Energy restaurant's of U.S. cost deregulated pricing we're supply our the distributors, the environment, high-efficiency so and up beer pursue and cost same has about region. packaging, level, the the in impact team, depending teams price suppliers contracts our aggressively of our specs. utility approximately At ultimate can in a the beverage cost XXX Examples impact on of that franchisees and contracts closely the about to restaurant to X-year lock energy sources in new supply of that's costs to why short cross-functional operations transition And costs. our and you mitigation XX% X.X% X% culinary in-restaurant server to to-go I prices. This on to results. of from to co-op, identified opportunities. to XX% tell mitigate including and ingredients food possible. the states, ideas our our Regarding product distribution include term. purchasing XX% is gas. in ovens, they're restaurants protected and about make monitoring at cost we to tablets, in expect our inflation I'll now increases lock our XXXX. franchisees QX energy in medium Many co-op's whenever secure is We've the this to priority also

Our the profit improvement asset-light And of comp revenue. for I'll model. increased for that $XX to XX business demonstrating growth and and and performance quarter million. up surpassed by X% more million $XX recognizing our million. Applebee's And new John unit on franchisees comparable healthy XXXX focus for the sales, We by Average by X sources sales weekly XX% and development. globally, restaurants of our for our are wrap the of an key new approximately will XX%, $XXX continued highlighting provide adjusted appetite and line areas quarter details year. of have we IHOP reflects opened by during the finally, now Jay rest in and improved of our respectively. Gross XX% top the growth delivered XX%, revenue approximately the stability EBITDA of to and

one-of-a-kind having First whether guest A outcome using Dine's brands fast-growing our is by pickup is scale. our at in supports is the your delicious in This our of International of technology and paying of our aggregator table to food and off-premise. program, experience to technology apps the includes in Bank before, enabled for on-premise after order customize great and new example benefits or an Pancakes. that The a restaurants tech our program IHOP's tangible loyalty investment of is curbside investments through your both partner. meal, investments or the delivered our the and during meal enhance

is order Applebee's third, in new meet and our The to evolve optimize prototype trade of our how And as for is brands with economics. working growth windows behavior of Applebee's idea ahead ghost in kitchens, substantial new all while unit to us introduce channels cost consumer or where a incremental capital. formats, we for build changes the here virtual disruptive kitchens. examples drive the we're with continuing restaurants restaurant can flipped Second, markets commitments that we're to are key to Those areas our casual to example, to such are and continuing allow of pickup franchisees new investing serve prohibited. fast new revenue teams version IHOP, low

QX new kitchen, ghost kitchens the total XXth in a opened overall international For ghost including example, our Applebee's and XX IHOP opened which in of Philippines.

to into We partnership virtual specific the our in new JustKitchen dayparts. lean also recently market. And enable with us brands announced Taiwan

[XX] to restaurants available are IHOP in approximately testing up brands, from X in virtual Dilla, available February, XX addition Cosmic and So are is now Super both XXX Thrilled in Cheese Wings, and which in Mega markets.

is our upswing. stronger is of plans. enter long-term our nimble choices results turn our than details of the the it With strategy we financial focused, protected to as today, smart tangible strategy while to that, successful bullish franchisees, investments our own to financial delivering the bold execution performance. ever I'll discuss and of Because over XXXX Vance The working. I'm our we and we poised of health execution the So our in as and of remain steadfast that health well as

Vance Chang

execution you, results actions Thank long-term continue strategy John. Well, quarter. to and solid the our of the deliver first guest-focused for

same revenues, the franchise year, which grew to strong top QX $XXX.X in driven of by quarter to improvement line, consolidated a strong for to The growth versus at brands. the the On was prior comp revenues sales million XXXX. compared rose both million XX% XX% due $XXX

was first of $XX.X XX%. XXXX million million the franchise improved percent franchisees for higher retail revenues quarter to the of sales, mostly drove of result the for XXXX. revenues, the rental Rental quarter compared income to by Excluding segment favorable which advertising The same for quarter. higher $XX.X revenues increased XX% variance

increased an in period for mainly travel increase to million first of million to company This the an due $XX.X stock-based $XXX as the depreciation personnel-related customer in we quarter in and to last the services for The costs return year. are to was approximately our activities. long-term million we G&A first operations, our changes million, of further to of sales QX expenses, to year. of our and due between this unlock in last support our with G&A continue update, during to anticipate operating from We growth. the was execute noncash range sustainable the $XX we of million For quarter full primarily as And line professional compared approximately to quarter. of to same increases in compared of million. capacity XX% traffic $XX.X for G&A and same comp year $XXX million $XX.X and as guidance including tracking was franchisee for restaurants the investment year QX variance through $XX.X quarter supporting XXXX normal strategy increase restaurant in

just compared the adjusted as increase quarter was for the The in $XX.X $XX.X was million For of I to the first to quarter XXXX, business, of XXXX. discussed. due million consolidated improvement same our EBITDA gross primarily profit

between significant was quarters variance the EPS due effective benefit in first in $X.XX $X.XX a in same by of $XX QX expense normal we $X.X The tax million the as adjusted quarter increase million period received we tax profit. to for adjusted tax EPS delta return a the the same that quarter compared primarily year, for a of 'XX versus Finally, to during to X was of of XXXX. partially offset income last rate the gross

from deferral larger collection the franchisee $X.X of QX of last QX. for earned cash the million same versus we $XX.X period The the cash XXXX. cash free 'XX, primarily for of used our for of of cash primarily first to QX due operations Cash quarter for as incentive was pandemic. as in quarter QX larger for $X.X paid granted $XX.X adjusted in performance from first statement We to marketing compared which XXXX XXXX, during In the million of the but the outflow capital. quarter in cash change of XXXX. XXXX of million to XXXX in from operations. CapEx million of In cash compensation $X.X driven million benefited quarter for compared for reflected of the flow initial of million of provided fees variance flow quarter inflow to $XX.X Turning year the payments in expenses compared of flows. the operations same was by a phase working first had a had from flow onetime of XXXX our prior, was the to incurred year, well cash the same

quarter. I the which million of repurchased touch continues also will the the more maintain We to quarter, to credit common finished $XX.X our With flexibility on $XX.X with our million. of healthy. This stay current $XX balance paid in returning and cash confident dividends for million million during of Even quarter shareholders borrowing levels unrestricted and fourth sheet at We capacity cash ability end the compares liquidity. million the $XXX.X later. facility, available with of to first ample total stock we're quarter, under on of our our $XXX.X our financial ratio unrestricted and the in back of the to cash details leverage

QX. of was X.XXx in to compared X.XXx As QX, it

a first Now XX% $X.XX capital our cash for the remain I'll share, was our April returning provide committed first to by to a X. dividend on quarter. allocation of per which We paid cash as shareholders, increase quarter in summary evidenced of

purchased XXXX $XX of $XX.XX price in weighted million we at a the per of quarter for share. average approximately XXX,XXX Additionally, shares first

as total a part will key repurchases strategy and over to cash increase We overall return deploy our use time. continue of excess to share shareholder

XXXX. business. that over confirm John? and that we guidance announced that, will very XXXX. on our Cywinski, strong start development to to will a XXXX, will more close, in performance to support tracking great With who still turn our I'll confident finish growth. for it QX the bold choices G&A, investments our share to John We're long-term was from To I Lastly, Applebee's and financial disciplined building CapEx, previously are EBITDA

John Cywinski

last February last you, fifth face quarter of year momentum comp continued CDR up March Thank to year, Applebee's sales up sales morning, XXXX XX.X% and but results. sales year-over-year comp XXXX, comp January Applebee's From category XX.X%, favorable we quarter, versus the the XXXX, with strong increase In and March a representing comp and and context sales in a QX Vance, comp XX.X% versus QX XX.X% on X-year close Black of overperformance QX trailed additional very our good were Applebee's were X-year the sales Omicron, X-year up growth. were out slightly given increase of very of QX this of consecutive everyone. Box X.X% perspective, a in and versus business versus versus substantial XXXX. sales requires

COVID absolute indication dollar last of inter-quarter both year, this may volumes on to year the it focus from a be Given mismatches performance. true brand and helpful for

with per baseline. let's record-setting So start volumes year's $XX,XXX last week a as of

impact Dine start record dropped to as worth March represents in under weekly accelerated $XX,XXX as to highest weekly in by that on volumes driven March, Applebee's January, $XX,XXX Given volumes Omicron's demand sales noting $XX,XXX the to February year, It's well and in organic peak seasonality. ownership. then sales

Applebee's sales core third-party awareness to should brand a in go that combination our XX% total proprietary business brand according competency, and delivery, leads to dine-in, this between Carside come genuine in QSR consideration attributes delivery where To-Go center business system. business not approximately billion fast category our $XX,XXX among it is affordability, call Applebee's XX% our of averaging a and which restaurants occasions. only became was $X.X In convenience, through business menu point-of-sale mix, XX% to week. casual a XXXX, online digitally and convenience-driven awareness a on Additionally, I but note momentum off-premise orders within reflected digital, Carside QX off-premise To-Go also overall now variety, orders awareness, our to our the with of $XX,XXX continues is key per of Applebee's and reviewing XX% and sales tracker. be

means by goal XXX% order which to more taking digital over no the approach members. Our by year-end, orders team phone is restaurant

become and strong XX% recovery process and tailwind attaining as now they year. business QX Grubhub. the completed DoorDash, On also our this Wings surprising from steady volumes. dining that late gradually we're not It's sales delivery our Cosmic its a X with younger and Z, peers we and as Gen guests, for return the past an younger XX%. Applebee's brand to continued is We other to front, activating segment core in family and profile, Applebee's of our dine-in strengths largest and on-premise virtual And both expansion accounting I of years over this dine-in expect than well representing CDR brands. millennial millennials QSR with at pre-pandemic eventual CDR as is night now more older with X Gen certainly XX% bit our than ethnic it which really dining and we much view as to love casual demographic similar age, guests our business to diversity Applebee's relative we've out

an absolute and between QX. X% prices perspective, from Applebee's increased in pricing menu franchisees Now X%

talk in this XX and mind, delicate margin our momentum, leaders with partners. the who meaningful smart continue franchise market leader. closely supply end clear expect, you ongoing positioned at often to environment believe opportunity of well in year and as very about subject continuum to and to we these a the brand. the is average and of Applebee's our and monitor and fundamentally guest We this affordability As business Applebee's scale, these our guest the share this marketplace affordability given the understand the CDR view actions might continue are chain our inflationary for And relative as low keep they very perceptions protection, navigate brand the strategic balance check position of

front, this development we year X X open as to restaurants kitchen expect approximately the as On restaurants. well ghost traditional

fewest our in less XXXX. net to plan year, with number for addition, on XX of a new inflection us than marking putting by In we window Applebee's XX planned years that with opened $X.X XX Virginia, restaurants we to to growth approximately XXXX. recently pickup improved I'm this also unit In pleased in to deliver in closures conversions track $X.X meaningful closing, fourth point and we close from the million million in year-end. volume drive-through in Applebee's drive-through unit XXXX report average

growth. optimism In higher. balance With be that, shared positioned well conference, could and plan, accelerate to our franchisees our it for the spring with off Applebee's in of innovation IHOP an brand. recent remains overview partnership our of to we year I'll our not where exceedingly Jay forward, this Looking franchise coming turn confidence

Jay Johns

your John. IHOP's everything equally accomplished pleased and that I'm you Good Thanks, this sure of achievements. franchisees I'm morning, everyone. proud with you're quarter. have

in IHOP we and late rolling over Despite breakfast. March the average As a were for night March impressive increased Notably, an comp to recovery sales wave, round up XXXX, the first year, high in approximately January sales an February the quarter driven approximately several month the up exceeding over quarter of quarter XX% the from particularly our stimulus strongest comps IRS. XX.X% the compared of rolled XXXX. quarter X.X%, $XX,XXX, in week of XX% Omicron last the the on XXXX, versus based the which volumes weekly despite sales increase period XXXX, third Average dayparts, positive last Comp reached weekly across of year. delivered of start for all of first by were included up payments XX,XXX XX.X%, sales same weekly March and metrics. by every

sales. On comprised business front, sales and the XX.X% in of XX.X% takeout X.X% delivery sales off-premise our accounting strong, remains for of to-go

accounted weekly quarter. off-premise pre-pandemic than for to of $X,XXX, levels volumes as were and for highly XX.X% dine-in more Importantly, our incremental sales approximately gradually still business the double average continues improve. sales Dine-in first

joy. the is marketing about build done doing Ultimately, what about it brand destination joyful positioning in and love comprehensive capabilities enthusiastic of way taking completing our we're the omnichannel our IHOP. for made-to-order meet our frequent to most approach by by: ever trust. a quality on guests brand the We've our strategy results the an and the discover to success. our to second, on people we're our research X-pronged that we're this brand is marketing IHOP a that our our they quarter, more While first, after improved relevant in food and provides; focusing to atmosphere a taking We're approach has channels strategy

Our the we this agency selection partnered help new online, guests more; a our and our lastly, engage Pereira plate." inspiration the based of when happiness campaign plan was the your tie great "let's on a record, of which media, campaign for We it IHOP loyalty brand, mobile, and food. which is The enhancing but International launching we of one-to-one program, our and new O'Dell, app will through unique the this of both guests, new announced for of launch campaign, Bank because a together, website smile also new on on relationships tagline, designed be course, includes ihop.com strategic social with feel not To differentiator new old encapsulates new program. Pancakes. the traditional TV our recent with our ad all new our loyalty and enjoying guests put our campaign our us our believe mobile only phase to and and, a with the

to which to on outside We control. the we're supply items an and media, recap, from menu other national X To and nonfood for at update I future. collect it drive program in-restaurant continues to ultimately the designed marketing in in in through by Switching you TV gears primarily with Investor to mid-April a our a be is earn-and-burn began pancake of be is direct redeemed Day, factors items allows Labor visits impacted stack At and currency. our digital. true to X calling will at IHOP, enhance on short franchisees. first operations. relationship additional example. input our signage, pan guests our PanCoins quarter, some a our discussed program there of better first briefly one-of-a-kind staffed is like with you others. get and is the from areas with degree our PanCoins can this our coins, that though As IHOP. IHOP approximately end was category. highlight based than I'd XX% variability, program, received The of our guests doing the to social what nationally

greater Regarding improved for SOP restaurants that approximately our are domestic XX% operating approximately hours, hours XX% the last from quarter. or of standard percentage open

Flybuy potential parking upside delivery our that alert off-premise made expect sales curbside and in implementation to-go platforms platform. enhances lot orders. the improvements additional friction. the and as is our which their On pickup progress to Flybuy us for made. app to we guests with continue completed to-go guest to business, of We to through our ability operational they've We our provides IHOP the reduces arrived the recently

to Turning development.

of about restaurants franchisees XX brand. overall we optimistic franchisees formats and domestic Our were the due opened of multiple to globally quarter, can openings. new health which offer development first in the outlook our I'm the the X

We In Thrilled test through Super brands. addition brick-and-mortar Cheese. the our virtual brands of also presence Mega announced partnership virtual Dilla to our with first recently footprint, expanded we our and through our NextBite,

restaurants XXX As of at brands brands accomplished we've wrap XX of QX. a several available virtual track still about next over great today, our virtual the XXXX. months. on We're for To up end activated are up, deal restaurants, from in early X,XXX through the

of the for transition call ahead. John I'll we As continue road John? over next the Peyton the phase I'm turn to now comments. very to about enthusiastic his our brand, closing back to

John Peyton

sales, focused and quarter, a it growth focused led thank and we're now growth, that and Thanks, teams you you that. on comp developing made we're call John open your X for the comments new questions. Operator, focused the on sources work to did Jay, and levers for Vance, laser-focused unit to for we're ready of on clear that we're Dine, super of on and we're your the terrific revenue,

Operator

the of and Brands Thank KeyBanc line Markets. Capital I Gonzalez this gentlemen, to First would from Global comes [Operator Earnings question you. Eric or Call. first Conference Dine Quarter comment Instructions] clarify like -- Ladies Our the just is from clarify that to

Eric Gonzalez

be to later that how against pressures does a year the about into question what know here. as potential value inflation ability the outlook? your this low what And in have to future, tell about macro Based sales mid-teens gut you 'XX? and balance momentum consumer strong important just will you on your macro and I the the sustain you really

John Cywinski

high ability is from Applebee's. muted. hear John here been is me? Confidence metrics -- this sustain. have None of our may you can Eric, to I on Eric,

Eric Gonzalez

hear. can we Yes,

John Cywinski

our metrics Applebee's other robust accelerated volumes unit throughout suggest of at anything quarter. growth. the None than Average

highs. I all-time referenced, attributes As are at

and given value We're question, value we affordability essential. second check lead, a average bullish. you'll is Our our consumer, see franchisees is believe, brand. are your our we well really and On a as what connection balance the propositions overt, are of value I'll maybe for opportunities profit call for bit brand well all margins healthy our franchisees. as emotional with a that more

So in a nutshell, Applebee's very bullish on year what the for represents balance of the this brand.

John Peyton

your uncertainty we like data. when by now the in fuel I'm right? Eric, inflation, worth to there supply encouraging is And things for in some exacerbated up, predicting about it's future see are jump of John is right time, a statistics some that that the and I Peyton. of challenge think chain, both apply you all we've the here cost going and headwinds implied in moment going tailwinds, I question think give At talked And to Ukraine. sharing brands. same

of the than for us. thing, alluded via to. eating QX I of our out, So the at in think dining part, tailwind a one home that's For And that in rising right? John faster success cost cost drives grocery is

the menu wage look also that earners And than The favorable prices QSR at we in They when at in time X% quartile X% pricing other growth, some which weight is confidence actually grew rising. U.S. is CDR them a thing of for customer. wages X the last a be faster increasing is than us. that bottom grew are which to our faster the gives quartiles, to quarter, when tends other

year. tailwinds, quarter in that think, moment give the return last momentum our the restaurants thing of So of as to intent data and high consumer continue And there some the the that about remains us at consumers explains, is and third-party I success we and is endemic research to for standpoint in look as say rest well. as our from I'll to this headwinds own first all compelling a well may the

Eric Gonzalez

you profitability. on maybe sense. franchisee makes could And touch if just all That

Given inflation points labor. and to of commodity probably maybe a the Applebee's, that mentioned bit X and at you of outlook, the little X price offsets side have which

or and that talk you So outlook? that where how about franchisee trend looked we can the year, through you profitability inflation stand just expect given how the to

John Peyton

why Vance, take you don't Yes. that?

Vance Chang

Eric. Sure.

know, here's So don't but what do we financials, franchisee we as you report now.

are sales issues. AUV. no and We seeing There's bad debt, same-store strong no AR

from pricing adjustments. improve appropriate labor that's franchisees that teams our interest our food or team and to franchisees XXX-plus and chain have have worth menu And not last I cost-saving item experience. usage one franchisees co-op think cross-functional food with reduce with cost thing beverage mentioning and and operations, formed in waste development also, impacting guest We costs our lower -- come up ideas production taken is has to and a restaurant while supply negatively the

cautiously the outlook. So overall, optimistic share think facts I we're -- the those are that could we and looking things are about

Operator

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

Jeffrey Bernstein

about. One, just on Couple the you comps questions. of healthy talked

you X-year have I think basis. to slowdown been March appeared that a a acknowledged on

best about just as the on I But I and to the a current that based just quarters, provide removing was months. obviously, great. whatnot. to get on any So your April, you of the of on follow-up. X-year best actually much just seasonality concern And And color trying get that then perspective AWS March us any have more slowdown? would could be

Jay Johns

my Jeffrey, of from at Johns brand, fairly the I say standpoint expected. this IHOP. can was this is Jay well

from you rollovers look at of the the If previous year. just March's. Both

were year, quite original up which that and ago, recovery that about years bit over when last you pandemic. If just March, a think that's we starting, impacted the started, which pandemic really meant already the X started rolling

compared up ticking to were year February. January last results March's tremendously and So

So pretty it's natural.

compared continued. was with that recovery continuing nicely. We still drop our down went year knew lot slowdown of You're had this year, into much it to was last get country we the think January and January, as the standpoint, March. month February. February, a And going going we what as to the of to was is the shut from line down a it in recovery pretty But expected I

Omicron of which a anything, nice if fact, more have impacted even we it have if we January, wasn't January should In more that, expected really though even did up been was negatively because for then. probably

John Cywinski

And of indication respect as comps Applebee's, whatsoever, slowdown Jeff, including very to -- strong, are March with X-year a no X-year our comps.

Jeffrey Bernstein

to color from any referring comment? of on or April Any provide intra-quarter month the

John Cywinski

here. color No

John Peyton

to It's Jeff. We're going John. refrain.

Jeffrey Bernstein

you. Got

Okay. mentioned, brands you in Obviously, while. a has financial obviously, virtual metrics just that little any then on been for And greater I'm the dine-in whether share you is around just recent can wondering months. returning. Cosmic

early you seem of exciting some capacity. evening that virtual. available lot easing make have maybe So whole the really a And test brands, then afternoon, on of and that which line IHOP in there's second results both

the So IHOP on be any early brands would virtual great. learnings

John Cywinski

Jeff, to here QX, since Wings, business partner. to providing delivery we respect We'll pretty still a resist this at but good to sales-wise when we're this John with process in on our expanding handle resist have on third any get I'll point. this on I'll Cosmic C. detail around

Jay Johns

what's way And in soon This excited to more very our happen has way we're virtual is more able IHOP, as It's about we looks. again. a begun. Jay predict brands, still this on and expand going little But the this bullish be on to at we're to really the restaurants.

a that at restaurants and the XXX $X,XXX I now Investor to Day, that sales were each expanded doing think of test set shared around in restaurants. restaurant, X the these at I we've brands first week per

to think I on get think I further, expand slightly, the as it's have And this to up out restaurants pretty well. several next drop potential I months, the it's maintaining but about expanding we very So as we program. said, may the rapidly. X,XXX within And

Jeffrey Bernstein

you wondering you like your the for this. And just year. to next opportunity huge growth within specific what can is it much guys know It it. to share But of international would like where if falls seem pivot unit doesn't lastly, about international I'm maybe and it's as growth about least Applebee's. big magnitude at talked seem vehicle a net to Got as or talked not I much. brand? a have

John Cywinski

a reestablishing to is in speak returning detail International referenced high-volume level I'll here. new pipeline. year, opportunities. where We our domestically. We'll trade 'XX. a know opportunity. meaningful but the in C. this John come Jeff, area on the We're Domestically, pretty very those high is confidence the growth XXXX. close net trade I unit opportunities particular, for growth area are, way, by

We have prototype. new a

expectations then of accelerate are but on in U.S. have We basis that in forward the new an demand. growth And to only annual to level return our not moving 'XX, unit to franchisee development net

John Peyton

And Jeff, it's John Peyton.

Just The of well. on X/X International. IHOP growth, as the is greater and is comment a mix recall more for a Day, for about from then mix you proportion ghost Investor may international internationally kitchens or

over XXX about Our is X aspiration goal the go to internationally our restaurants there, next to years. from XXX

Operator

question the next Jake comes Truist Our from of from Bartlett line comment Securities.

Jake Bartlett

little on really think a value perspectives. consumer, the on thanks hear I was and at Mine the maybe focus in for more I comments, macro And the did Applebee's.

menu the is So down trade wondering weight the the lower a that for maybe are of expand whether impact is more on because in I'm that, approach from bit what towards could rest income just value of it if consumer? seeing side. any your if some the Is you or year? And sort you of a that

John Cywinski

John Jake, C.

love a Regarding household the as I $XX,XXX. check the number about guest at value. We're And referenced. of ways are of Applebee's, income average there average That's profile, the mentioned. lower we -- to deliver as is I end continuum, our

incredibly buck that which really are ads, January popular to In or resonated other among performed wings America. loyal Some wanted any those this we guests, offered really were well There our In Applebee's. February, our opportunities connect actresses in for no of those most [overt]. very there we X emotionally. -- with March, handcrafted those are January, February guests bonus per regulars, actors our with burger, in and ads

whether overt, entertainment-based propositions it's co-branding whether even whether there's forward. perhaps or so it's value-added, moving some And

ability We X pipeline to visibility to years. very change course and our have be as the needed clear innovation the past and we've over done as nimble

income So at moment. we in has number ways the We'll pulse at creative who Applebee's, do it discretionary with that on innovative guest reasonably will just always of finger a deliver limited value. and the our of

Jake Bartlett

Great. next And my question helpful. on for That's Jay is Applebee's.

-- the is opportunity have opportunity breakfast. the you hours lost that so mentioned here. What far for and You been hours the recovering in

in If -- still my weekly see think first obviously, versus the talk overall, in still? relationship sales on recover average 'XX quarter. about you to breakfast much can sales breakfast X% How math maybe there we about I to where is -- down is stands an basis maybe room

Jay Johns

Jay. has board forward. though. is We've this on we think, Breakfast now, right other I got move our opportunities, across work as to the any than more to Well, sales continue comp actually for recovered daypart us

known the It's a they about guests what time. So And probably for. if were IHOP that's you about missing we're hadn't our long it, breakfast most think in been as strong. is most what

high breakfast to how in many the are the the think beginning you sure. even down other getting lot a prevent which work not tells to recovery impacted as whole as faster and there's pressure could going being know people well. the past, be. may don't just not remember And are be bigger going people they that even out, flex So one pandemic, And the I negatively no they I now, think of And out and our is work shut and our to thing causing it was as much though at back world business kind how back days as were than from frankly, I is think headwinds of to of are the work. up. I now We're

as still So you there's fast. impacted weekend lot stacked, tables restaurant a of opportunities, in gets I a the turn can't which negatively both think if breakfast, isn't

throughput much weekend. on as get if staffed can't restaurants you're not those You through the

you opportunity. go if breakfast weekend I our to that's breakfast, back comps Weekday multiple So years obviously, think, ago.

people on and way, time, And people opportunity how have think And to way. I work, is how have the how paradigm from of But gives X much and people I new think not we've permanent back are also breakfast because a in weird this but same little jobs there to time, later. the a behavior, there's and shift they hours them now getting even much a start this behaving. over flexibility quantity. know working I to don't think in own are their I which, are morph of more their in out breakfast opportunity the though will just fine work a got of go sneak

So now, it's and weekend a right think on there's but on recovering nicely. it's still but I a strange the considerable breakfast, upside, dynamic going weekdays both for

Operator

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

Brian Vaccaro

March provide like -- about stacks weekly consumer back And didn't the other your the in monthly be Could did why back any on sectors some core multiyear brand at sales I'm strong be at just like about average just highlighting? come performed And sorry, Applebee's. thinking as Omicron. seems you it and the might might did 'XX, at that guess, you I IHOP changes to maybe like as IHOP how broader exiting thoughts And talk have. for worth IHOP that you behavior

John Peyton

out for XX,XXX, don't did the it those I'll And those average was Brian, I I question. the for -- the entire at topped real did grab March. then try for the I have quickly. my quarter, Thanks, average. I week say a that quarter, whole say we at XX,XXX fingertips. the think, to

years, first Omicron a we or compared got improving in to past the So it cetera. we bit after did of X little where the variant probably weeks was X because prior et keep struggled Omicron, the

tell on if [Indiscernible] just here. to now, you So look you

month, looks then XX%, averaged was March. like first XX% it in about XX% it then the in we January almost So and in is

softness Omicron of So got before the can it was see you variant. we And most this kept past February Valentine's Day. building once

first those weeks was building it's that. it then from weak, X or X and So started

improve I and did pretty greatly think was strong. March that

like when was last comp from off, -- I look over year. dropped rolling you on that's really answered the at the first look but last we looked it year. in comp already on to relation question, at recovery the like when think I you sales, you're the The

the off, kept like looks it's sales it growing. but So weekly held

Brian Vaccaro

each definitely average sales back weekly that given On No, to well. the recovery focused on out year. baskets in was quarter. more Can Yes. as inflation year-on-year to inflation, in each circle their you the brand and spring first we one expect that the commodity the just And in the wanted moving comps considering how how you right. differences terms the start just share then sort for to than of inflation, lapse of the XXXX? last for Right, brand, in what play on each of I

John Peyton

Yes. Yes, Brian.

first are for we inflation, So inflation IHOP about the XX% half, probably half. first the XX% for expecting Applebee's and seeing

somewhat and the in half. So second it then that -- moderates

the So teens year-over-year low half inflation in probably of year. to gets second down the

we're is year XX% the for out averages to whole what So to expecting about for XX% the brand.

Brian Vaccaro

Great. Okay.

What you to that for pricing clarify the then that just wanted helpful. -- say speak also last to said pricing to? one That's took you to I the menu me. Applebee's about -- that? I just Okay. menu And John, Could ask recently on year-on-year you X% IHOP pricing. heard that I level does And then X%. And bring side. the of think

John Cywinski

Sure, probably think this last is very X% way took X% Brian. to And -- moving about our forward. to -- probably [fees] QX, X%. Applebee's best in The -- average thoughtful to year, measured on And they're the and pricing John C X%.

to they're So think for with basis, guests. margin continuing if attempting value you great clearly balance on deliver to X-year a that about protection the

success. successful, been think anticipate I very that they've I

Jay Johns

Yes, Jay. this is

this versus On the look pricing the IHOP year at IHOP QX took last what is side, X.X% year-over-year at if you year overall. look at QX

Operator

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

Nick Setyan

of March Can you terms just the both weekly remind in sales us April, historical May average just for to in June seasonality relative and [Indiscernible].

John Cywinski

Nick. Sure,

this a John Applebee's is is month. For March -- C. high-volume

a of you XX sales a think think the And March to it. about month, perhaps our good As year, to XXX month. the a that way upon the sense? September, highest indices from look That's of volume our would volume about likely lowest flow range be Makes at volume depending kind across month.

Nick Setyan

about What Yes. IHOP?

Jay Johns

-- We don't side. look we quarter-to-quarter, if IHOP seasonality have you overall. true any have don't any

and very March. go school, individual probably months up spring time as tends to As similar March. you Any weeks, that a kids and in break of you at to that out tend John bit are help many have said, little down got

of time, our of busier for material end then back of also months. So not a And it's in September us. slower it's August, to a but one probably it's the little period, school bit

Nick Setyan

of Any a year. the within rates throughout weight out marketing marketing versus And in some for stand each higher about quarter others quarter what then that maybe brand? terms

John Cywinski

C. John is this Nick,

$XXX on XX-second basis. year basis, mix versus full in up in quarter I regulars bringing by an evenly the on a ads to referenced called QX, deploy working annual those resonated. $XXX And in we media of million to and a in ads that really year million lean last So into February pretty heavier January, a did bit we dispersed life

ad that little heavier look we February XX-second year-over-year of bit a the year. because of but quarter-over-quarter the ago in probably of versus spend balance So at balanced year investment, dollar as a January, very

Jay Johns

Jay. this is And Yes.

IHOP try out to spread throughout year. the evenly We this the fairly similar. side, On very

is I used strategy. philosophy even We've always we different more than to our not have reasons. to as to. do what fact, at an our so mentioned, changed strategy, kind we national now audiences enables move And to be doing In TV, try omnichannel to us for to but different just of more stream. of of messages And on marketing is day or all to that, the events different different times parts in on really that

throughout spending year. that, evenly of the you're pretty because money So

Operator

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

Brett Levy

against and about sales largely questions two capacity. Just

then First, a side? little what you get specifically And if across about since get color and sensitivity scale important that do the seeing more such what sales operations, great you you're give you're talk see of to from a last XX%? just able in as the is demand incremental challenge well bit it country you could on terms kind if as of there? SOP. to How incremental XX% of And profitability operational

Jay Johns

So that recovery some was waves the recovery think country, the causes the across and coming across country, shutdown is I as if that far cetera. the This as Jay. Thanks. even look you et right? Brett, not back, the

closures. up. look rolling as closed over severe the is numbers down back parts impact [Indiscernible] that year. there doing were other sooner. wasn't et example, much the simple you're fact now, for But They last still ones if opened a you well the the much pretty on cetera, country up in last right to at were Southeast, of they open but And really So where they pretty

rollovers their now So year. are already harder this

it as It whole even an playing hasn't as it's field goes been the recovery time. even far not shut how down wasn't So and when either. the

the dynamic there connection faster, have that's about you pockets to the staffing is And goes last restaurants question gets a And point to staffing, harder your are has of hotter, recovery the does So the missing opportunity economy to closer, been procedure where is then hours. maintain. for one we're about of hours that That closer standard to the and our hours We're on. country every asked half of our operation, big getting to operating and get overnight about where really making get the open full get paid a used to a market worth progress still is, where overnight, quarter to as example, back they franchisees in us the those though, restaurants the with cook that that [Indiscernible] We much you pay, on overnight overnight sales, brands work one on, have opportunity business pay if of of may think lot for decision overnight have back. frankly, sales. we're with you XX. an evening to the A comes that. eventually you those market. did very business. and bullish but actually us make getting And that in virtual To is to in being P&L your will it help

work. people different are on getting to economics the So

going, have of they that So Well, the at brands a it sense you those also over up have do open to more it used virtual them worthwhile get the to and once. much get hurdle both hours to now I can if makes IHOP expand business to extra make to

that the more there, help I that overnight more get also our think business. we can out the will So

Operator

line Bank. question the comes Brian from from next Our of comment Deutsche Mullan

Brian Mullan

to Just casual maybe environment, advertising over of this back year. the course broadly dining across the coming

plan more of on if rates and ahead it's you spending even you peers something incorporate meaningful be of if into out you control. your you maybe for to own that a just your Applebee's can't or kind there so, is curious Or plans? Just expect time run something advertising And in way. can

if quickly more do get you how curious would you'd feel and Just that if have competitive. things a sense

John Cywinski

players I in With competitively. that that, to more C here. disciplined. attention on validate were pay large we XXXX. John formidable our landscape do with guests execute. aggressive plan marketing We're -- dining and very have Brian, the we said, casual dining before competitors. We have thoughtful terrific casual that being anticipate fairly we a we We

execution attention with XXX superior. of by said, And year. competitors, last basis to points did our pay level also that we Our is outperform while we

And the meaningful that XX on among dividends in brand. that's a franchise earned we've we of believe the to for culture, have groups. America. genuinely we So very Applebee's pay a going basis particular, trust strong And our post-pandemic

that some to You strong culture may trust matter and preference loyalty and superior do. competitors combine and what execution not upon choose it with our based respects, in

it. We we're have a strategy and going execute clear against to

Brian Mullan

those term, in the you even if And as place. the you think on a all longer the to clear. coming your the current strength then a there just benefit very in the of good conversely, you Or quarters? stores the that company-owned some You might that is owning wasn't thought. I over have operations brand, With see you give That's look follow-up, Understood. maybe believe. thinking the really those do sell original

John Peyton

take Brian, it's I'll John that. Peyton,

the that terms changed. of it team proud taken quartile Our It's of one our portfolio, to top thinking right? in which performance. hasn't operating moved quartiles done, has lower was of in what our We're and

remains. long-term it about, about I it the we but because of the some flip give being remains information And very same. holder we've but is point philosophy future. proud was we're not can't the the talked COVID, our that. to those intent So any might restaurants a a is as when But of have deferred transaction, in at you of strategy

Operator

from is from of Brooks question final Benchmark. Our Todd the line

Todd Brooks

we XX% If at one brands of both staffing that look the communicated. to Just question. kind plan

getting see targeted those opportunity flow, opportunity where able look stand the within kind X onboarding, I'm And wondering to most experienced where X of these buckets, leveling you do It on the a buckets? feels move we're is those night XX% you buckets. we low like of where of industry-wide, the kind retention, really training to and shift to needle? late kind levels. them each in people be this at staffing enough maybe applicant of If up, man out of

John Cywinski

Todd, C. John

Regarding than we Applebee's, we hiring significantly executed year. prior was flow held great, really that a national higher when Applicant in the day.

good in a Our we're need quite candidly pretty lower, meaning was position.

fairly culture, Retention Again, which a strong. be in equally selective. that is to can always particular this is restaurants environment. Our comes strong. Training back challenge

paint us want It even been pleased I is execute last a So we're challenge everything allows levels. to say our staffing don't year. would rosy What that to including an overly propositions, late contemplating, very I picture. would which with we're night have perhaps

Jay Johns

Yes.

is this -- think Jay. I

the finding staff On not of we We programs they trained I pickings challenge, that's are have And get up people be. so good and We've improvements think And the used biggest our quickly. than great thinner made to challenge. really us, training get pretty now. think for a I right? but lot You IHOP applicants, our to probably that biggest gets hire still to right? qualified is want anybody side, can work that can

us, the I it's staff. for overnight those hours. finding And I think still again, to refer

that's hours also You get source, got for work find little able as reasons to been and And well. we've these to not to harder willing the of back the all shift. overnight people one to us that's a

little the business then your get people bit Once work coming you really out overall. as of want more more there, get again, just for all thing too, back, the things the a that it make helps tips tips, So a servers flywheel. to more It's you. cranked are

Operator

queue in any I'd to closing the management time. this for questions to conference turn over additional no showing the I'm like back at remarks.

John Peyton

a team well great the good to on later appreciate today for deeper. Thanks, today. to thanks our on you of some a we'll Howard, go be know little and I And for thanks quarter. your bit to phone of it. you And with questions all as We

thanks great So the time you and for spent have a day. morning, us this with

Operator

conference. concludes Ladies participating This and you the for gentlemen, today's thank in program.

now may a have wonderful disconnect. day. Everyone, You

Dine Brands Global (DIN) 4 May 222022 Q1 Earnings call transcript