Dine Brands Global, Inc. Reports Second Quarter 2025 Results

Dine Brands Global, Inc. (NYSE:DIN) (the "Company" or "Dine Brands"), the parent company of Applebee's Neighborhood Grill + Bar^®, IHOP^® and Fuzzy's Taco Shop^® restaurants, today announced financial results for the second quarter of fiscal year 2025.

"In the second quarter, we continued to build positive momentum across both Applebee's and IHOP, with notable improvements in sales and traffic. Applebee's benefited from strong consumer response to our value-driven promotions and continued innovation in menu and marketing, while IHOP saw growth fueled by its refreshed brand positioning and value strategy. At the same time, our Dual Brands initiative is building traction with our franchisees as our second domestic unit also opened with strong economics. We remain confident that our ongoing investments will generate sustainable value for our shareholders and franchisees based on these results," said John Peyton, Chief Executive Officer of Dine Brands.

Vance Chang, Chief Financial Officer, Dine Brands added, "In this quarter, we successfully completed a refinancing transaction that strengthens our capital structure and enhances financial flexibility, positioning us well for future growth. We remain committed to delivering shareholder value through sustained financial performance and strategic investment."

Domestic Restaurant Sales for the Second Quarter of 2025

• Applebee's year-over-year domestic comparable same-restaurant sales increased 4.9% for the second quarter of 2025. Off-premise sales accounted for 22.0% of sales mix in the second quarter of 2025 representing per restaurant average weekly sales of approximately $12,800.

• IHOP's year-over-year domestic comparable same-restaurant sales declined 2.3% for the second quarter of 2025. Off-premise sales accounted for 20.0% of sales mix in the second quarter of 2025, representing per restaurant average weekly sales of approximately $7,600.

Second Quarter of 2025 Summary

• Total revenues for the second quarter of 2025 were $230.8 million compared to $206.3 million for the second quarter of 2024. The increase was primarily due to an increase in company restaurant sales attributable mainly to the acquisition of Applebee's and IHOP restaurants prior to the second quarter of 2025 offset by a decrease in franchise revenues and a decrease in rental income.

• General and Administrative ("G&A") expenses for the second quarter of 2025 were $50.8 million compared to $46.9 million for the second quarter of 2024. The variance was primarily attributable to an increase in compensation-related expenses and an increase in professional service fees, both due in part to the G&A expenses related to company restaurant operations as well as dual brand and remodel initiatives.

• GAAP net income available to common stockholders was $13.2 million, or earnings per diluted share of $0.89, for the second quarter of 2025 compared to net income available to common stockholders of $22.5 million, or earnings per diluted share of $1.50 for the second quarter of 2024. The decrease was primarily due to a decrease in segment profit and an increase in G&A expenses.

• Adjusted net income available to common stockholders was $17.4 million, or adjusted earnings per diluted share of $1.17, for the second quarter of 2025, compared to adjusted net income available to common stockholders of $25.6 million, or adjusted earnings per diluted share of $1.71, for the second quarter of 2024. The decline was primarily due to a decrease in segment profit and an increase in G&A expenses. (See "Non-GAAP Financial Measures" for reconciliation of GAAP net income available to common stockholders to adjusted net income available to common stockholders.)

• Consolidated adjusted EBITDA for the second quarter of 2025 was $56.2 million compared to $67.0 million for the second quarter of 2024. (See "Non-GAAP Financial Measures" for reconciliation of GAAP net income to consolidated adjusted EBITDA.)

• Development activity by Applebee's and IHOP franchisees for the second quarter of 2025 resulted in seven new restaurant openings and 46 restaurant closures.

First Six Months of 2025 Summary

• Total revenues for the first six months of 2025 were $445.6 million compared to $412.5 million for the first six months of 2024. The increase was primarily due to an increase in company restaurant sales attributable mainly to the acquisition of 59 Applebee's and 10 IHOP restaurants partially offset by a decrease in franchise revenues and a decrease in rental income.

• G&A expenses for the first six months of 2025 were $102.1 million compared to $99.0 million for the first six months of 2024. The variance was primarily due to an increase in professional service and legal fees and costs related to company restaurant operations as well as dual brand and remodel initiatives, partially offset by a decrease in stock-based compensation and a decrease in software maintenance costs.

• GAAP net income available to common stockholders was $21.1 million, or earnings per diluted share of $1.41, for the first six months of 2025 compared to net income available to common stockholders of $39.4 million, or earnings per diluted share of $2.64 for the first six months of 2024. The decline was primarily due to a decrease in segment profit, an increase in closure and impairment charges and an increase in G&A expenses.

• Adjusted net income available to common stockholders was $32.8 million, or adjusted earnings per diluted share of $2.20, for the first six months of 2025 compared to adjusted net income available to common stockholders of $45.5 million, or adjusted earnings per diluted share of $3.04, for the first six months of 2024. The decline was primarily due to a decrease in segment profit and an increase in G&A expenses. (See "Non-GAAP Financial Measures" for reconciliation of GAAP net income available to common stockholders to adjusted net income available to common stockholders.)

• Consolidated adjusted EBITDA for the first six months of 2025 was $110.9 million compared to $127.8 million for the first six months of 2024. (See "Non-GAAP Financial Measures" for reconciliation of GAAP net income to consolidated adjusted EBITDA.)

• Cash flows provided by operating activities for the first six months of 2025 were $53.1 million. This compares to cash flows provided by operating activities of $52.2 million for the first six months of 2024. The increase was primarily due to a favorable change in working capital primarily due to the timing of income tax payments postponed due to wildfire relief, offset by a decrease in segment profit and higher G&A expenses.

• Adjusted free cash flow was $48.7 million for the first six months of 2025. This compares to adjusted free cash flow of $52.9 million for the first six months of 2024. (See "Non-GAAP Financial Measures" for reconciliation of the Company's cash flows provided by operating activities to adjusted free cash flow.)

• Development activity by Applebee's and IHOP franchisees for the first six months of 2025 resulted in 16 new restaurant openings and 85 restaurant closures.

Key Balance Sheet Metrics (as of June 30, 2025)

• Total cash, cash equivalents and restricted cash of approximately $263.2 million, of which approximately $194.2 million was unrestricted cash.

• Available borrowing capacity under the 2025 Variable Funding Senior Notes, Class A-1 is over $224 million.

GAAP Effective Tax Rate

The Company's effective tax rate was 30.6% for the six months ended June 30, 2025, as compared to 26.4% for the six months ended June 30, 2024. The effective tax rate for the six months ended June 30, 2025 was higher than the rate of the prior comparable period primarily due to a lower tax deduction related to stock-based compensation, resulting from the changes in our stock price.

Capital Returns to Debt and Equity Holders

As previously disclosed, on June 17, 2025, the Company completed the refinancing of its Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II and issued the Series 2025-1 6.720% Fixed Rate Senior Secured Notes, Class A-2 with an initial aggregate principal amount of $600 million, which bear interest at a fixed coupon rate of 6.720% per annum, payable quarterly, and have an expected term of five years.

On the same date, the Company also terminated its 2022-1 Variable Funding Senior Notes, Class A-1 and entered into a purchase agreement for the issuance of up to $325 million of Series 2025-1, Class A-1 Variable Funding Senior Notes, which will allow the Company to borrow amounts periodically on a revolving basis and issue letters of credit. The applicable interest rate will depend on the type of borrowing.

During the second quarter of 2025, the Company repurchased approximately $6.0 million of its common stock and paid quarterly cash dividends totaling approximately $8.0 million.

Financial Performance Guidance for 2025

As a result of our sales, traffic and dual brand pipeline to date, we are further investing in the business to accelerate development opportunity as well as strengthen our company owned portfolio. As such, the Company‘s fiscal year 2025 guidance items have been updated as follows:

• Updated: Applebee's domestic system-wide comparable same-restaurant sales performance is expected to range between positive 1% and positive 3% (versus between negative 2% and positive 1% previously).

• Updated: IHOP's domestic system-wide comparable same-restaurant sales performance is expected to range between negative 1% and positive 1% (versus between negative 1% and positive 2% previously).

• Reiterated: Domestic development activity by Applebee's franchisees is expected to be between 20 and 35 net fewer restaurants.

• Reiterated: Domestic development activity by IHOP franchisees and area licensees is expected to be between 10 net fewer restaurants and 10 net new openings.

• Updated: Consolidated adjusted EBITDA is expected to range between approximately $220 million and $230 million (versus between $235 million and $245 million previously).

• Updated: G&A expenses are expected to range between approximately $205 million and $210 million (versus between $200 million and $205 million previously). This total includes non-cash stock-based compensation expense and depreciation of approximately $35 million.

• Updated: Capital expenditures are expected to range between approximately $30 million and $40 million (versus between $20 million and $30 million previously).

Dine Brands does not provide forward-looking guidance for GAAP net income because it is unable to predict certain items contained in the GAAP measure without unreasonable efforts. These items may include closure and impairment charges, loss on extinguishment of debt, gain or loss on disposition of assets, other non-income-based taxes and other items deemed not reflective of current operations.

Second Quarter of 2025 Earnings Conference Call Details

Dine Brands will host a conference call to discuss its results on August 6, 2025, at 9:00 a.m. Eastern time. A live webcast of the call, along with a replay will be available for a limited time at https://investors.dinebrands.com. Participants should allow approximately ten minutes prior to the call's start time to visit the site and download any streaming media software needed to listen to the webcast. An online archive of the webcast will also be available on Events & Presentations under the Investors section of the Company's website.

About Dine Brands Global, Inc.

Based in Pasadena, California, Dine Brands Global, Inc. (NYSE:DIN), through its subsidiaries and franchisees, supports and operates restaurants under the Applebee's Neighborhood Grill + Bar®, IHOP®, and Fuzzy's Taco Shop® brands. As of June 30, 2025, these three brands consisted of close to 3,500 restaurants across 19 international markets. Dine Brands is one of the largest full-service restaurant companies in the world and in 2022 expanded into the Fast Casual segment. For more information on Dine Brands, visit the Company's website located at www.dinebrands.com.

Forward-Looking Statements

Statements contained in this press release may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these forward-looking statements by words such as "may," "will," "would," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "plan," "goal" and other similar expressions. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to be materially different from those expressed or implied in such statements. These factors include, but are not limited to: general economic conditions, including the impact of inflation, particularly as it may impact our franchisees directly; our level of indebtedness; compliance with the terms of our securitized debt; our ability to refinance our current indebtedness or obtain additional financing; our dependence on information technology; potential cyber incidents; the implementation of corporate strategies, including restaurant development plans; our dependence on our franchisees; the concentration of our Applebee's franchised restaurants in a limited number of franchisees; the financial health of our franchisees, including any insolvency or bankruptcy; credit risks from our IHOP franchisees operating under our previous IHOP business model in which we built and equipped IHOP restaurants and then franchised them to franchisees; insufficient insurance coverage to cover potential risks associated with the ownership and operation of restaurants; our franchisees' and other licensees' compliance with our quality standards and trademark usage; general risks associated with the restaurant industry; potential harm to our brands' reputation; risks of food-borne illness or food tampering; possible future impairment charges; trading volatility and fluctuations in the price of our stock; our ability to achieve the financial guidance we provide to investors; successful implementation of our business strategy; the availability of suitable locations for new restaurants; shortages or interruptions in the supply or delivery of products from third parties or availability of utilities; the management and forecasting of appropriate inventory levels; development and implementation of innovative marketing and use of social media; changing health or dietary preference of consumers; changes in U.S. government regulations and trade policies, including the imposition of tariffs and other trade barriers; risks associated with doing business in international markets; the results of litigation and other legal proceedings; third-party claims with respect to intellectual property assets; delivery initiatives and use of third-party delivery vendors; our allocation of human capital and our ability to attract and retain management and other key employees; compliance with federal, state and local governmental regulations; risks associated with our self-insurance; risks of major natural disasters, including earthquake, wildfire, tornado, flood or a man-made disaster, including terrorism, civil unrest or a cyber incident; risks of volatile or adverse weather conditions as a result of climate change; pandemics, epidemics, or other serious incidents; our success with development initiatives outside of our core business; the adequacy of our internal controls over financial reporting and future changes in accounting standards; changes in tax laws; failure to meet investor and stakeholder expectations regarding business responsibility matters; and other factors discussed from time to time in the Company's Annual and Quarterly Reports on Forms 10-K and 10-Q and in the Company's other filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release are made as of the date hereof and the Company does not intend to, nor does it assume any obligation to, update or supplement any forward-looking statements after the date hereof to reflect actual results or future events or circumstances.

Non-GAAP Financial Measures

This press release includes references to the Company's non-GAAP financial measures "adjusted net income available to common stockholders", "adjusted earnings per diluted share (Adjusted EPS)", "Adjusted EBITDA" and "Adjusted free cash flow." Adjusted EPS is computed for a given period by deducting from net income or loss available to common stockholders for such period the effect of any closure and impairment charges, any intangible asset amortization, any non-cash interest expense, any gain or loss related to the disposition of assets, any gain or loss related to debt extinguishment, and other items deemed not reflective of current operations. This is presented on an aggregate basis and a per share (diluted) basis. Adjusted EBITDA is computed for a given period by deducting from net income or loss for such period the effect of any interest expense, any income tax provision or benefit, any depreciation and amortization, any non-cash stock-based compensation, any closure and impairment charges, any gain or loss related to debt extinguishment, any gain or loss related to the disposition of assets, and other items deemed not reflective of current operations. "Adjusted free cash flow" for a given period is defined as cash provided by operating activities, plus receipts from notes and equipment contracts receivable, less capital expenditures. Management may use certain of these non-GAAP financial measures along with the corresponding U.S. GAAP measures to evaluate the performance of the business and to make certain business decisions. Management uses adjusted free cash flow in its periodic assessments of, among other things, the amount of cash dividends per share of common stock and repurchases of common stock, and we believe it is important for investors to have the same measure used by management for that purpose. Adjusted free cash flow does not represent residual cash flow available for discretionary purposes. Management believes that these non-GAAP financial measures provide additional meaningful information that should be considered when assessing the business and the Company's performance compared to prior periods and the marketplace. Adjusted EPS and adjusted free cash flow are supplemental non-GAAP financial measures and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP.

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