Dine Brands Global, Inc. (NYSE:DIN) Q2 2023 Earnings Call Transcript - Page 6 of 6 - InvestingChannel

Dine Brands Global, Inc. (NYSE:DIN) Q2 2023 Earnings Call Transcript

Jeffrey Bernstein: Okay. And then the G&A , just to clarify, on the P&L in your press release, you show the $47.8 million, I’m just trying to figure out what the correct number to use for the adjusted 2Q G&A, so it’s apples-to-apples with the guidance for $200 million to $210 million. I was under the impression we should back up the full $5.8 million, but it sounds like you’re saying something different. So what’s the adjusted 2Q G&A that is apples-to-apples with the $200 million to $210 million that we should be thinking about for the full year?

Vance Chang: It’s, 40 – about $44 million, so that, that incremental million-ish of the add-back sits in franchise operations. And so collectively that’s the $5 million, that makes up the $5 million that we added back on EBITDA.

Jeffrey Bernstein: Got it. So the $47.8 million gets reduced to the $44 million and that’s on top of, I believe the $49 million or so in the first quarter. And those are the apples-to-apples that we use to get to the $200 million to $210 million.

Vance Chang: That’s right.

Jeffrey Bernstein: Understood. Lastly, just trying to clarify on the promotional – again, I think it was more commentary related to Applebee’s, but you talked about the peers activity has been increasing. We talked to some of your large national peers and they were saying it seems like people are being more prudent and not being overly aggressive on promotional activities. So, I’m just trying to assess whether it’s big chains or maybe independence or how you kind of think about that promotional activity and how you potentially respond to that? Thank you.

John Peyton: Tony, why don’t you address that since it was an Applebee’s question.

Tony Moralejo: Happy too. We monitor competitor activity, but it really doesn’t impact our overall strategy. We’ve been regarded as an industry leader, a value-based player in this segment for many, many years. And there are others, they’re trying to figure out their discounting campaigns, but we have a proven track record, right? We have a playbook that’s produced strong results. Our focus in this environment is really in four areas. We’re working on creating new value offerings. We’re extremely focused on culinary innovation. We’re going to continue to drive operational excellence and we’re going to improve our dining environment and experience. And these focus areas are what our guests are telling us. You’ll always see us react to our guests are telling us and not because what our competitors are necessarily doing.

It’s why we continue to maintain our leadership position in affordability and visit intent and brand and add awareness and inconvenience. And you can expect a continued focus on these areas for the balance of the year.

Jeffrey Bernstein: Understood. Thank you.

Operator: Thank you. [Operator Instructions] Our next question comes from the line of Brian Vaccaro from Raymond James. Please proceed.

Maggie Juarez: Hi, this is Maggie Juarez on for Brian Vaccaro. Thanks for the question. We just wanted to follow up on the health of your consumer. Could you elaborate on any recent changes you might be seeing as it relates to frequency within specific income cohorts, any changes in sales mix or attach rates on appetizers, alcohol? Any color there would be helpful.

John Peyton: Sure. It’s John, I’ll take that. We’ve said a couple things about the consumer and there’s the behavior and as well as the profile. So, we can confirm again, as we mentioned last quarter, that, that we continue to grow our share of younger guests, among our target income, and that’s been an improvement to the last several quarters based upon where we were pre-COVID for example. And we think that’s a reflection of many things, including that both brands have gotten even better at targeting younger guests on funnels [ph], and meeting them where they are. And that’s particularly fantastic, in my opinion because, our – we have two mature brands in Applebee’s and IHOP. And by the way, Fuzzy’s also has a young guest.

So for mature brands like that to continue to appeal to younger guests and grow that space is terrific. In terms of their mindset, I mentioned early on that we are seeing that average check is the same. But we’re also seeing, for example, that at Applebee’s, the LTOs and the value oriented menu, that section grew from 15% to 19% last quarter. So, we’re beginning to see, a modest change in behavior toward of our consumers becoming a little bit more cost conscious. We also saw them shifting a bit from delivery to pickup to save the delivery fees on off-prem. So it like that, that suggests to us that the guest is becoming, a bit more, a bit more cost conscious, a bit more cautious in the last quarter. And I’ll look at that. Thank you.

Maggie Juarez: Thank you.

Brett Levy: And if that is all, we will now turn it over to John Peyton for closing remarks.

John Peyton: All right. Great. Gerald, thank you for taking care of us this morning. And thank you to all of you who dialed in and asked the questions. We appreciate it and we appreciate the time you took to hear about our quarter and our plans for the future. So everyone have a great day. Thank you.

Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.

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