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Dine Brands (DIN) Q2 Earnings Beat, Revenues Miss Estimates

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Dine Brands Global, Inc. (DIN - Free Report) reported better-than-expected earnings for the sixth straight quarter in the second quarter of 2018. However, the company’s revenues fell short of the Zacks Consensus Estimate.

Adjusted earnings were $1.03 per share, beating the consensus estimate of 94 cents. However, the bottom line decreased 20.8% from the prior-year quarter. The downturn is due to the company’s lower segmental profits, which were partially offset by increased comps, a decline in bad debt expenses and restaurant development at IHOP.

Total revenues in the reported quarter were $184.5 million, up 18.9% on a year-over-year basis. However, the top-line figure lagged the consensus estimate of $186.2 million. Increase in revenues was attributable to growth in comparable sales across both brands.

Brand Performances by Comps

Applebee's domestic system-wide comps increased 5.7%. This compares favorably with the prior-year quarter’s decline of 6.2%. Moreover, in the first quarter, the company’s brand has witnessed gain of 3.3%.

IHOP’s domestic system-wide comps were up 0.7%, comparing unfavorably with the first quarter’s growth of 1% but favorably with the prior-year quarter’s decrease of 1.7%.

DineEquity, Inc Price, Consensus and EPS Surprise

Costs, Gross Profits& Net Income

In the second quarter, the total cost of revenues increased 10.7% year over year to $105.9 million. Subsequently, gross profits were $78.6 million, down 15.5% from the year-ago quarter.

General and administrative expenses in the quarter decreased 3.7% year over year to $38.8 million. However, net income was down 42.5% to $12.7 million compared with the year-ago quarter.

Balance Sheet

As of Jun 30, 2018, cash and cash equivalents amounted to $95.7 million compared with $117 million as of Dec 31, 2017. Long-term debt at the end of second-quarter 2018 totaled $1,265.1 million compared with $1,269.8 million at the end of 2017. Goodwill as of Jun 30, 2018, was $339.2 million.

Cash flow from operating activities totaled $25.8 million as of Jun 30, 2018, compared with $20.9 million as of Jun 30, 2017.

In the reported quarter, the company paid a dividend worth 63 cents.

2018 View

Applebee's domestic system-wide comps are anticipated to grow 3.5-4.5%, up from the previously guided range of flat to up 3%. At IHOP, domestic system-wide comps are expected to increase 0.5-2%, up from the former guidance of flat to up 3%. The company continues to expect adjusted EPS of $4.95-$5.25.

Zacks Rank & Peer Releases

Dine Brands currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

McDonald's (MCD - Free Report) reported impressive second-quarter 2018 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings per share of $1.99 surpassed the consensus mark of $1.92 by 3.6% and increased 15% from the year-ago quarter (12% in constant currencies). The upside reflects a stronger operating performance.

Darden (DRI - Free Report) reported better-than-expected results in the fourth quarter of fiscal 2018. Adjusted earnings of $1.39 per share outpaced the consensus estimate of $1.35 by 3%. The bottom line also increased 17.8% year over year on the back of higher revenues. Notably, the reported quarter marked the 15th consecutive earnings beat for the company. Darden’s relentless efforts in improving the basic operating factors of the business — food, service and atmosphere — drove the company’s bottom-line performance.

Chipotle (CMG - Free Report) reported better-than-expected results for the second quarter of 2018. Adjusted earnings of $2.87 topped the Zacks Consensus Estimate of $2.78 by 3.2%. The bottom line also grew 23.7% from the year-ago quarter, backed by increased revenues and lower food costs.

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