Markets
DIN

DineEquity Tops Q3 Earnings, Cuts Applebee's Comps View

DineEquity, Inc.DIN posted mixed third quarter 2015 results with earnings beating the Zacks Consensus Estimate but revenues missing the same. The company posted soft comps. Also, the company lowered its comps guidance for Applebee's Neighborhood Grill & Bar (one of its brands) for the second consecutive quarter. Share price of the company fell 3% in yesterday's trading session.

Earnings and Revenue Discussion

Adjusted earnings of $1.43 per share beat the Zacks Consensus Estimate of $1.42 by 0.7%. Meanwhile, it increased 25% year over year. The upside reflects a significant decline in interest expense and cost of revenues, partially offset by higher general and administrative expenses.

Dineequity Inc. (DIN) - Earnings Surprise | FindTheCompany

Total revenue of $162.4 million fell 0.3% year over year. Also, it missed the Zacks Consensus Estimate of $166.0 million by 2.2%. The downside reflects soft comps. The company completed the sale of its Applebee's restaurant in Jul 2015 that resulted in a decline in Franchise and restaurant revenues. However, it was partially offset by an increase in rental and financing revenues.

Behind the Headline Numbers

The company operates under the Applebee's Neighborhood Grill & Bar and IHOP brands.

IHOP's domestic system-wide comps increased 5.8% driven by Summer Stacks pancakes and double dipped French toast promotion. However, comps compared unfavorably with the prior quarter comps growth of 6.2%.

Due to lack of enough sales boost efforts, Applebee's Neighborhood Grill & Bar domestic system-wide comps declined 0.5% that compared unfavorably with the prior quarter comps growth of 1%. The company believes that efforts for the brand have not been enough to date.

Total cost of revenues declined 7.7% year over year to $65.8 million.

Comps Guidance Update

The company lowered Applebee's comps guidance for 2015 for the second consecutive quarter. Comps are now expected in the range of flat to positive 1% compared with the previous expectation of 1% to 3%. Meanwhile, the company re-affirmed its comps guidance for IHOP in the range of 4% to 5%.

DineEquity presently has a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the same industry include Carrols Restaurant Group, Inc. TAST , Dave & Buster's Entertainment, Inc. PLAY and Cracker Barrel Old Country Store, Inc. CBRL . All these stocks sport a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CRACKER BARREL (CBRL): Free Stock Analysis Report

DINEEQUITY INC (DIN): Free Stock Analysis Report

CARROLS RESTRNT (TAST): Free Stock Analysis Report

DAVE&BUSTRS ENT (PLAY): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

DIN CBRL TAST PLAY

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More