The latest earnings report from Dine Global Brands Inc. – the parent company of Applebee’s International Inc., IHOP and other major restaurant franchises – is likely leaving investors hungry for more, though the company’s offered assurances that it’s tightening its belt.
Dine’s revenue in the first quarter of 2023 was $214 million, according to the Glendale-based company’s latest earnings report, released in May. That was down from $230 million in the first quarter of last year.
The company attributed the decline primarily to the re-franchising of 69 company-operated Applebee’s units in October. The loss was partially offset by positive sales growth at its other restaurants. Total revenues for the first quarter, excluding the re-franchised Applebee’s restaurants, increased $20 million from the comparable prior period according to Dine, and development activity by Applebee’s and IHOP resulted in a net gain of four new restaurants.
General and administrative expenses for the first quarter of 2023 were $51.1 million compared to $41.5 million for the first quarter of 2022, an increase chiefly caused by “continued strategic growth investments” including the acquisition of the mostly southern-based franchise Fuzzy’s Taco Shop for $70 million, and other non-recurring costs. Dine also noted expenses associated with a return to normalized operations post-pandemic as a contributing factor.
Net income nonetheless saw an increase over last year’s first quarter report.
Vance Chang, chief financial officer of Dine Global Brands, told investors the mixed results was largely the result of the company balancing its focus between current strategy execution and long-term investments.
“After the end of the first quarter, we were pleased to announce the completed refinancing of our Senior Secured Notes, further evidence of the strength of our steady and strong cash flow generating franchisor model in today’s lending environment,” Chang said in a statement.