Dine Brands Global, Inc. Q3 FY2024 earnings call

• IHOP Leadership Transition: Jay Johns retired, Lawrence Kim joined as President. - Applebee's: Faced tough conditions, kicked off NFL partnership, launched value initiatives like Pick 6 promotion, Burger Tuesday LTO, and Real Big Meal deal. - IHOP: Launched House Faves program, saw improvement in guest satisfaction metrics from enhanced off-premise offerings, and has 860 24-hour locations. - Fuzzy's: Patrick Kirk promoted, launched new menu items and regional happy-hour deal. - International: Driving growth with dual-brand locations, targeting 15 sites and first U.S. domestic location in Q1 2025.

Applebee's: Q3 same-restaurant sales were negative 5.9%. Average weekly sales were over $49,500, with over 21% of total sales from off-premise (11% to-go, 10% delivery). IHOP: Q3 same-restaurant sales were negative 2.1%. Average weekly sales were $37,000, with 19% of total sales from off-premise (7% to-go, 12% delivery). Fuzzy's: Q3 comp sales and traffic were pressured, but new value promotions helped improve performance. International: 8 net openings year to date, with 3 dual-brand locations opened, performing well and achieving 1.5 - 2 times the revenue of single-branded restaurants.

• 2024 G&A guidance revised to $195 million to $200 million, including non-cash stock-based compensation and depreciation of approx. $35 million. - Reiterated other guidance from prior quarters. - 2025 plans include expanding dual-brand locations domestically, starting with Seguin, Texas in Q1 2025.

• Macro challenges impacting performance, such as consumers pulling back on discretionary spending, especially lower-income consumers eating at home more. - Highly competitive and promotional operating environment. - Uncertainty in executing marketing strategies and promotions effectively to drive traffic and repeat business.

Q: Do you need to make similar operational adjustments like your peer?

A: Need to be more consistent in operations, service, quality of food and promotions. Our franchisees are willing to invest, and our asset-light model allows us to help franchisees.

Q: What's the biggest roadblock in value messaging?

A: Value hasn't been consistent enough. Need more stable everyday type value. IHOP rolled out House Faves program, Applebee's has new campaign.

Q: Can we see positive comps in Q4?

A: Applebee's new campaign kicks off next week aiming to drive positive comps. IHOP's House Faves and other initiatives are expected to improve results.

Q: On value incidence and off-premise?

A: Applebee's 31% of tickets were LTOs/everyday value (same as prior quarter), IHOP 16% (slightly up). IHOP off-premise at 19%, working on improving phone orders. Applebee's off-premise improving due to adjusted marketing and operational efficiency.

Q: Pricing and average check?

A: Applebee's franchisees took 2.7% on pricing, IHOP 6% on pricing. Applebee's had flat P mix, IHOP slight negative P mix. Expect low single-digit pricing changes going forward.

Q: Trajectory of same-store sales and innovation?

A: Q3 had consistent pressure, but starting to see improvements in Q4. Innovation remains important, integrated with value platform.

Q: Average check trends and lapped promotions?

A: Average check trends likely to continue current trajectory. Applebee's lapped holiday skillets promotion, replaced with new all-encompassing value promotion.