Markets
DIN

IHOP Parent Reports Fast Sales Rebound, Strong Cash Position

Reporting this morning on its second-quarter 2020 results, Dine Brands Global (NYSE: DIN) beat analyst consensus on revenue for the quarter and reported an extremely swift rebound in same-restaurant sales over the 13-week period. Known previously as IHOP, Inc., the parent company of the IHOP and Applebee's Neighborhood Grill + Bar chains has received positive investor attention since the release, with its share value climbing almost 11% by midday.

While COVID-19 clobbered Dine Brands' same-restaurant sales earlier in the year, with Applebee's sales down 77% during the week ending April 5 and IHOP's at negative 81.5% during the same period, today's report shows the company recovering rapidly. For the week ending June 28, the last of Q2, Applebee's sales had rebounded to negative 17.8% and IHOP's to negative 34.4% -- still in negative territory, but greatly improved.

An upward moving line chart with a paper airplane at its tip.

Image source: Getty Images.

In the earnings release, CEO Steve Joyce highlighted Dine Brands' adaptability as one key source of the fast comeback, saying the easing restrictions on dining rooms and "the significant growth of our brands' off-premise business, contributed to the progress made during the quarter." By the end of June, 95% of restaurant locations were open and operational again, though some were using a delivery and take-out only model of service and others had reopened their dining rooms, depending on local conditions.

The company's financial position already looked solid a month ago, and today's press release confirms this. Joyce remarked on its "strong liquidity with approximately $342 million of cash, of which $279 million is unrestricted cash." Though the company's $109.7 million in revenue represents a 51.9% drop year over year, it still beat analyst estimates by roughly $10 million. The adjusted earnings per share (EPS) of negative 0.87% also surpassed consensus predictions, in this case by $0.06.

10 stocks we like better than Dine Brands Global
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Dine Brands Global wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 2, 2020

 

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More