Executive Summary

Mixed quarter with top-line essentially flat and profit metrics down: revenue $204.8M (-0.7% y/y), GAAP diluted EPS $0.34 vs $2.14 y/y, adjusted EPS $0.87 vs $1.40, and adjusted EBITDA $50.1M vs $62.2M y/y, reflecting negative comps at Applebee’s and IHOP and higher charges offset by Applebee’s company-run units taken back in November .
Comps remained negative: Applebee’s -4.7% and IHOP -2.8% in Q4; off-premise held ~21-20% of sales mix (Applebee’s 21.6%, IHOP 20.4%), helping stabilize weekly sales levels (Applebee’s ~$11.0k, IHOP ~$7.8k per restaurant) .
2025 guide is cautious but invest-to-improve: Applebee’s SSS -2% to +1%, IHOP -1% to +2%, adjusted EBITDA $235–$245M, G&A $200–$205M, CapEx $20–$30M; Applebee’s net -20 to -35 units; IHOP -10 to +10 net .
Strategic catalysts for the stock: U.S. dual-brand launch showing ~3x opening-week sales vs prior stand-alone, “Looking Good” remodel program oversubscribed by large franchisees, and a new everyday value platform (H2’25) to re-accelerate traffic; management expects modest Q1 improvement but a still-challenged consumer backdrop .

What Went Well and What Went Wrong

What Went Well

Sustained free cash flow and balance sheet flexibility despite headwinds: 2024 adjusted FCF $106.4M (vs $103.3M in 2023) and unrestricted cash $186.7M at year-end .
Dual-brand momentum and remodel buy-in: first U.S. Applebee’s + IHOP opened with almost 3x prior IHOP’s opening-week sales; 6 of top 10 Applebee’s franchisees (57% of system) committed to accelerate remodels by end-2025, supporting brand refresh and future comps .
Value platforms gaining late-Q4 traction: Applebee’s “Really Big Meal Deal” accounted for ~20% of transactions and supported QoQ traffic improvement; IHOP “House Faves” value menu drove late-Q4 traffic and media efficiency, underpinning 2025 plans .

What Went Wrong

Negative comps persisted: Applebee’s -4.7% and IHOP -2.8% comps in Q4, pressured by a highly promotional industry and lower-income consumer softness (~two-thirds of DIN’s guests under $75k HH income) .
Profit compression: Q4 adjusted EBITDA fell to $50.1M (from $62.2M), and adjusted EPS to $0.87 (from $1.40), reflecting lower segment profit and higher closure/impairment charges .
Category-specific cost headwinds at IHOP: egg inflation (avian influenza) and some bacon/coffee pressure drive low-to-mid single-digit commodity inflation for 2025 at IHOP; no surcharges taken, but margin pressure needs monitoring .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenues ($M)	$206.3	$195.0	$204.8
GAAP Net Income to Common ($M)	$32.3	$18.5	$5.0
GAAP Diluted EPS ($)	$2.14	$1.24	$0.34
Adjusted Diluted EPS ($)	$1.40	$1.44	$0.87
Adjusted EBITDA ($M)	$62.2	$61.9	$50.1
G&A Expenses ($M)	$50.5	$45.4	$52.3

Revenue mix (quarterly)

Revenue Line ($M)	Q4 2023	Q4 2024
Total Franchise Revenues	$176.0	$167.2
Company Restaurant Sales	$0.3	$8.4
Rental Revenues	$29.5	$28.7
Financing Revenues	$0.6	$0.4
Total Revenues	$206.3	$204.8

KPIs (Q4 2024 unless noted)

KPI	Applebee’s	IHOP
Domestic same-restaurant sales (y/y)	-4.7%	-2.8%
Off-premise sales mix (%)	21.6%	20.4%
Avg weekly off-premise sales ($ per restaurant)	~$11,000	~$7,800
Avg weekly unit sales ($K, system)	$51.0 (Q4)	$37.9 (Q4)
System reported sales ($B, Q4)	$1.012 franchise + $0.008 company	$0.813 franchise + $0.073 area license

Restaurant counts and development (end of Q4 2024)

Brand	Franchise	Company	Total	Domestic	International
Applebee’s	1,567	47	1,614	1,501	113
IHOP	1,670 (franchise) + 154 (area license)	—	1,824	1,694	130
Fuzzy’s	116	1	117	117	—

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Applebee’s domestic SSS	FY 2025	N/A	-2% to +1%	New
IHOP domestic SSS	FY 2025	N/A	-1% to +2%	New
Applebee’s net domestic development	FY 2025	N/A	-20 to -35 units	New
IHOP net domestic development	FY 2025	N/A	-10 to +10 units	New
Adjusted EBITDA	FY 2025	N/A	$235M–$245M	New
G&A expenses	FY 2025	N/A	$200M–$205M (incl. ~$35M non-cash SBC + D&A)	New
Capital expenditures	FY 2025	N/A	$20M–$30M	New
Dividend	Q1 2025	$0.51 (Q1’24 declaration)	$0.51 declared for Q1’25	Maintained

Earnings Call Themes & Trends

Topic	Q2 2024 (Prev Mentions)	Q3 2024 (Prev Mentions)	Q4 2024 (Current)	Trend
Value strategy & promotions	Consumer pullback; revised FY24 guide; focus on profitable promotions	Highly promotional environment; planned to enhance value in Q4	Applebee’s “Really Big Meal Deal” (~20% transactions), late-Q4 traffic lift; IHOP “House Faves” value menu traction; everyday value platform to launch H2’25	Improving execution, competitive backdrop persists
Menu innovation	Ongoing innovation to manage near-term challenges	—	2025 pipeline across appetizers/handhelds/beverages; new items tied to value platform; Big Easy LTO performing well	Building
Dual-brand concept (Applebee’s + IHOP)	—	—	First U.S. site opened Feb’25; ~3x opening-week sales vs prior IHOP; pipeline 12–14 in 2025; strong franchisee demand	New positive catalyst
Remodel/reimage & prototype	—	—	“Looking Good” reimage launched; 30 company remodels in 2025; prototype reveal Q2’25; incentives oversubscribed by large franchisees	Accelerating
Digital/loyalty & marketing	—	—	Club Applebee’s enhancements; dynamic social; IHOP media optimization lifting working dollars ~20%	Strengthening
Commodities/supply chain	—	—	Applebee’s flat-to-slightly down in 2025; IHOP low-to-mid-single-digit inflation on eggs; no egg surcharges	Stabilizing w/ egg risk
Macro/consumer tone	Consumer pullback weighed on traffic; guidance cut	Consumer pullback continued; Q4 value plans	Lower-income guest under pressure; expecting modest Q1 improvement	Cautious

Management Commentary

“For 2025, we have a clear plan that addresses both the short-term and long-term and are confident that, in partnership with our franchisees, we will elevate the guest experience and enhance our value propositions.” — CEO John Peyton .
“In November, Dine took over 47 Applebee’s restaurants… we plan to remodel 30… and convert 5 restaurants to our dual brand concept… Our goal is to refranchise these restaurants, which will help strengthen our franchise base.” — CEO John Peyton .
“Six of our top 10 franchisees, representing 57% of the Applebee’s system have already elected to accelerate remodels… based on the Looking Good program.” — CEO John Peyton .
“Adjusted EBITDA for Q4 2024 decreased to $50.1 million… 2024 EBITDA includes approximately $10 million of incremental marketing investments made to the brand’s advertising funds.” — CFO Vance Chang .
“In its opening week, the [dual-brand] restaurant achieved sales of almost 3x the amount of its performance as a stand-alone IHOP.” — CEO John Peyton .
“We are expecting Q1 to continue to improve modestly from Q4. But we do expect the consumer environment to remain challenged for the rest of the year.” — CFO Vance Chang .

Q&A Highlights

Value effectiveness and incidence: Applebee’s “Really Big Meal Deal” drove incremental lunch sales and overperformed in digital; total value mix ~27–28% at Applebee’s with “2 for $25” included; IHOP value mix ~17–18% with House Faves + 55+ menu .
Near-term trend check: Management expects modest sequential improvement in Q1 vs Q4, but maintained a cautious macro outlook in 2025 guidance .
Commodities and surcharges: IHOP seeing egg-led inflation (low-to-mid single-digit basket); no egg surcharges implemented; some tailwinds in chicken/turkey/ribs help Applebee’s .
Applebee’s unit takebacks: Rationale includes revitalizing units for refranchising (~3-year horizon), showcasing ROI of remodels, and converting select sites to dual brand to advance strategy .
Franchisee alignment: Marketing/operations committees aligned; strong interest in remodel incentives and dual-brand pipeline (12–14 this year; building to 50–60 next year) .

Estimates Context

Wall Street consensus for Q4 2024 (EPS, revenue, EBITDA) via S&P Global was unavailable at the time of analysis due to a temporary data access limit; as a result, we cannot present an estimates vs. actuals comparison. We will update when S&P Global data is accessible.

Key Takeaways for Investors

2025 is a reset-and-invest year: guide brackets modest comps and stable EBITDA, while DIN invests behind value, remodels, and dual-brand—positioning for improved traffic and mix in H2’25 and beyond .
Near-term trading setup hinges on validation of sequential comp improvement in Q1 and early read-throughs on Applebee’s everyday value platform rollout timing and efficacy in late spring/early summer .
Dual-brand is the biggest medium-term upside swing factor; early Seguin performance and franchisee demand (airports/travel centers included) argue for an expanding pipeline and favorable unit economics .
Applebee’s “Looking Good” reimage plus prototype refresh are levers to improve in-restaurant experience and off-premise enablement, likely aiding comps/margins as remodels ramp .
IHOP faces category cost pressure on eggs; monitoring commodity normalization and value menu cadence will be key to defending margins while driving traffic .
Balance sheet and cash generation provide optionality: 2024 adjusted FCF of $106M and $186.7M year-end unrestricted cash support dividends ($0.51 maintained) and targeted reinvestment .
Execution risk remains: negative comps, promotional intensity, and lower-income consumer sensitivity could limit upside until value/innovation programs demonstrate sustained traffic gains .

Appendix: Additional Detail

Domestic Restaurant Sales Color (Q4 2024)

Applebee’s comps -4.7%; off-premise 21.6% of mix (~$11k average weekly off-premise sales per restaurant) .
IHOP comps -2.8%; off-premise 20.4% (~$7.8k average weekly off-premise sales per restaurant) .

Cash Flow and Capital Returns (FY 2024)

Cash from operations $108.2M; adjusted FCF $106.4M; dividends ~$31M; buybacks ~$12M .

Balance Sheet (12/31/24)

Total cash, cash equivalents and restricted cash ~$248.6M (unrestricted ~$186.7M) .

2025 Guide (reiterated)

Adjusted EBITDA $235–$245M; G&A $200–$205M (incl. ~$35M non-cash SBC + D&A); CapEx $20–$30M .
Applebee’s SSS -2% to +1%; IHOP SSS -1% to +2%; Applebee’s net -20 to -35; IHOP net -10 to +10 .

Quarterly Financial Statements (Q4 2024)

GAAP net income to common $5.0M; diluted EPS $0.34; adjusted diluted EPS $0.87; adjusted EBITDA $50.1M .

Dividend

Board declared $0.51 per share for Q1 2025, payable April 4, 2025 ; prior Q1 2024 dividend also $0.51 .

Dine Brands Global, Inc. (DIN)·Q4 2024 Earnings Summary