Back to top

Image: Bigstock

Dine Brands' (DIN) Q4 Earnings & Revenues Beat Estimates

Read MoreHide Full Article

Dine Brands Global, Inc. (DIN - Free Report) , formerly known as DineEquity, Inc., reported better-than-expected results in fourth-quarter 2017.

Management announced that it changed the company’s name effective Feb 20, as part of its transformation process. However, the ticker symbol remains unchanged.

Adjusted earnings of 74 cents per share surpassed the Zacks Consensus Estimate of 64 cents by 15.6%. However, the bottom line declined 46% from the prior-year quarter. Decline in the company’s gross profit has affected earnings but was partially offset by fewer weighted average diluted shares outstanding.

Total revenues in the quarter came in at $148.8 million, a decline of 3.5% year over year. However, revenues marginally surpassed the consensus estimate of $148 million. Revenues were affected by closing down of a few restaurants and non-collectible franchise royalties from Applebee.

DineEquity, Inc Price, Consensus and EPS Surprise

 

 

Shares moved 0.5% in after-hours trading following the earnings release on Feb 20. Meanwhile, Dine Brands’ shares have gained 56.6% in the past six months, outperforming the industry’s gain of 1.8%.

The company’s brand revitalization strategies reflect slightly in the fourth-quarter comps performance. The company expects these strategies to pay off in the first quarter of 2018. However, Applebee’s bad debt expense has put pressure on gross profit, which in turn has dented the bottom line.

Let’s delve deeper into the numbers.




Brand Performances by Comps

Applebee's domestic system-wide comps increased 1.3%. This compares favorably with the third quarter’s decrease of 3.2% and the prior-year quarter’s decline of 7.2%.

IHOP’s domestic system-wide comps were down 0.4%, comparing favorably with the last quarter’s decline of 7.7% and the prior-year quarter’s fall of 2.1%.

Cost, Gross Profit & Net Income

Total cost of revenues in the quarter increased 13.2% year over year to $71.6 million. Subsequently, gross profit in the quarter came in at $77.2 million, down 15.1% from the year-ago quarter.

General and administrative expenses in the fourth quarter increased 8.1% year over year to $40 million. However, net income increased a whopping 300.7% to $85.5 million, compared with the year-ago quarter. The upside was primarily driven by income tax benefit.

Balance Sheet

As of Dec 31, 2017, cash and cash equivalents amounted to $117 million, compared with $140.3 million as of Dec 31, 2016. Long-term debt at the end of 2017 totaled $1.27 billion, down from $1.28 billion at the end of 2016. Goodwill as of Dec 31, 2017 was $339.2 million, down from $697.5 million in the prior year.

Cash flow from operating activities totaled $65.7 million as of Dec 31, 2017, compared with $118.1 million as of Dec 31, 2016.

Management announced a cash dividend of 63 cents per share of common stock for the first quarter of 2018. The dividend will be payable on Apr 6, 2018, to stockholders of record at the close of business on Mar 19, 2018.

2017 Highlights

Adjusted earnings in the year came in at $4.15 per share, a decline of 30.9% year over year. The deterioration in adjusted net income was mainly due to lower gross profit and an increase in general and administrative expenses. 

General and administrative expenses were $165.7 million in 2017 compared with $148.9 million in 2016. 

Applebee's domestic system-wide comps declined 5.3% in 2017, whereas IHOP's domestic system-wide comps fell 1.9%.

2018 Guidance

Both Applebee and IHOP's domestic system-wide comps are expected in the range of flat to up 3%. Applebee's franchisees are expected to open 10 to15 restaurants globally, while that of IHOP's might open 85 to 100.

The company expects adjusted EPS in the range of $4.95-$5.25.

General and administrative expenses are expected between $147 million and $156 million.

Zacks Rank & Peer Releases

DineEquity carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Chipotle Mexican Grill (CMG - Free Report) posted mixed fourth-quarter 2017 results, with adjusted earnings of $1.34 per share surpassing the consensus estimate of $1.32 by 1.5%. Earnings also grew 143.6% year over year on lower costs and higher revenues.

McDonald's (MCD - Free Report) reported fourth-quarter 2017 adjusted earnings per share of $1.71, beating the consensus mark of $1.59 by 7.5%. Earnings improved 19% from the year-ago quarter (16% at constant currency). The upside reflects strong operating performance and G&A savings.

Dunkin' Brands fourth-quarter 2017 adjusted earnings of 64 cents per share beat the Zacks Consensus Estimate of 63 cents. Earnings, however, stayed flat year over year, as a decline in adjusted net income was offset by lower shares outstanding.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


DINE BRANDS GLOBAL, INC. (DIN) - free report >>

McDonald's Corporation (MCD) - free report >>

Chipotle Mexican Grill, Inc. (CMG) - free report >>

Published in