Dine Brands Global (DIN) 2 Nov 222022 Q3 Earnings call transcript

Good day. Thank you for standing by. Welcome to the Dine Brands Global Third Quarter 2022 Conference Call. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. Instructions]. [Operator that being advised conference today’s be recorded. is Please the now for to would technical like Levy over hand to apologize I Brett call and difficulties. all we Thank you.

I'm Brands' Good John and Relations Cywinski, Chang, and by Dine I’m Applebee's; quarter to John and and for Vice Jay Dine President Global, of this morning, conference of of welcome Treasury IHOP. call. Johns, CFO; joined Brett Brands Investor Peyton, Levy, President Vance third President morning CEO;

to John, forward-looking over remember Before our regarding we call turn Harbor please information. Safe the

financial During and detailed the the or expressed The may may be website. risks, release assumes of and context other call, these obligation of press is management to in may XX-Q today's discuss which refer in those and Investor which involves in uncertainties, implied. and also also these information statements factors, that Please on to factors, which cause forward-looking results statements. than are as Dine or unknown Relations available the today, evaluate forward-looking non-GAAP actual known Brands' our press the to are measures, and different supplement We are release information update described and no filing. certain forward-looking

transaction inclusive color are provide of While we third over schedule. the not to reporting the volatility I call to operated during related had trends will our quarterly closed With results that, John. uncertainty, to company inter units may on we quarter and traditional returned the our the turn as have Please quarter’s quarter. Applebee’s note

members. our franchisees, IHOP our thanks and We Thanks to us seasoned and marketing importantly, team quarter, agility, delivered and and solid good team brands, and everyone. operational morning, today. Brett joining our leaders Applebee's, of our Thanks, the Dine our strength of most another for

X.X% sales and IHOP Despite and resilient. consumer positive consecutive the sixth you've of comp growth seventh our IHOP. persist, you was QX inflation macro economic As X.X% headwinds this achieved remained respectively. for Applebee's and others, Applebee's heard sentiment. and of particularly quarter from as sales environment, know and comp brands

what's dining our importance modest two continuing of And XX% and to QX, I've to Applebee's the that improve easing rate of rate pre-pandemic focusing in as and XX% is costs in experiencing from on sales Through more Notably spending. $XX to more And adjusted Dine than run quarters quarter, cost ahead during Ukraine grain prudent the of cost via of to levels. during the buybacks. of and the XXXX by strong XX% looks of eggs from was and inflation year. and of addition, the ground. impact our for the XXXX, shareholders first in three control. $XXX due on ultimately months to war the of the decline to In to like delivered remain our before In returned reflecting supplies talked the million, times. food importantly, back over a half a cost inflated prices G&A uncertain mix. $XX stubborn we to goods pancake the of of results off fell six Applebee's the during first brands XX%. about saw the IHOP an remained approach our restaurants. inflation IHOP XXXX times IHOPs dividends continued we premise is gain is million million EBITDA our

financial guest at love. well so consumers they like brands reflect moments mindset situation. right both to value value message we're trust known is brands our and proposition these, now The know During amplifying stick our with and and our

our progress investments sources technology, revenue. in development, we the strategic you walk I'll and of priorities, new includes Now made through across this

our doubled delivering back of products is more new of experience, the than since XXXX. as tech in-restaurant well annual and technology. house tech world Our front guest of enhancing team as out time we've restaurant spend and class both We're on House and

and Some year, examples learning and of and recently fly completed scheduled websites rollout new continue app IHOP streamlines the of IHOP's management go new by guest next of for and Applebee's with our include tech pay the new technology sale. system, that we point interaction

openings. is and traditional confidence our unit to restaurant Applebee's expand. toward our development, of long-term continues Next is new IHOP its combination portfolio growth our driving The continues in and path formats net

are priority third brands we and IHOP locations building for offers XXXX We're virtual international. and now an to opportunity Applebee's virtual opportunities IHOP’s sales is in portfolio. Our and revenue. our both over late its kitchens XX across dinner and within brands of hours new incremental are our have virtual sources pipeline virtual and brand attractive long-term brands brand. night target there's for the believe ghost

on confident the next challenging While scale With allows for and the financially us We're I'll ability headwinds deliver price morning, because and well that, some we're supply to we over sound, turn expect in quarters, more We're that times. detail. challenges our as Good over Vance. to performance to call confident is outlook We're our in goals. the near-term mitigate to our iconic Dine resilience are degree review longer-term and Vance our disruptions to financial our franchisees. in is brands. positioned confident and few Dine the navigate confident of our

John. you, Thank

we As over the the momentum third in right direction. last us and is built quarter plan a you moving that mentioned, continued year half the our the and

the $XX.X over segment $XXX.X X% total completed revenues sales to was Company $X.X X% compared for favorable of improved by grew Rental year. franchise quarter for continue of XXXX our $XX.X company positive of to higher XXXX were quarter, last higher as for of week. refranchising Our to percent support comp sales, we growth of third same generated growth million third franchisee’s of million year's adjusted investments quarter. quarterly in $XX.X period was quarter for brands. million quarter X% We of million rental as the consolidated to same sales We the result the brands. ahead margins revenues year. the due year last last at in both compared our to quarter The mostly EBITDA third retail million year-over-year slightly our million strategic drove results. $XX.X the which restaurants of $XX.X million the of restaurant income over last G&A last variance this increased

outstanding. was primarily Finally, EPS quarter was the adjusted weighted third The for variance dollar and to year's outpacing $X.XX. $X.XX, shares due lower last

to Turning cash balance and sheet. statement flow our

XXXX, from The cash variance $XXX.X the saw flow over working from operations two we capital year-to-date from operations last million the nine months Over compares cash comparable change period in prior was generated in operations to year. the first QX to and flow discussed we flow of of This quarters. cash million. due $XX.X in of in the

also to rates from our marked normalized continued levels. as gradually quarter position a mid-year we cash results conversion working returning This saw improvement our and capital

third financial million, quarter our total of down ended flexibility. mid-August, of $XXX.X the $XXX.X upsizing million. unrestricted also drew subsequently we with at to greater VFN quarter. We announced provides the capacity with the $XXX cash the In end This which us and compares of second of unrestricted under available we borrowing million cash our

below was Our times, ratio which last leverage to X.XX quarter. the X.X moved times

continue and makes advantage the if shareholders Dine window the isn't cash to sense to best to returning remains our of But we take long class right will the As bonds until action have of advance option the A-X-X we for meantime, course of repayment evaluate In in now. refinancing anticipated discussed June our previously, term. our the date our shareholders. committed we it XXXX. bonds for to

the September During been We cash XXth. million the we and shareholder a on QX The key shares and focus repurchased of driving repurchase year-to-date of dividends dividend paying of combination has value. count share our start year. a component long-term share remain or our our X.X capital over third quarter, of $X.XX on support total per as approximately of retired allocation the X% since paid of of our plan shares

I would for to year. update guidance our Next, like the financial

on touch development. me let First,

compared openings. to XX is construction X to to year. the The for XX our development given our development prior XX of current plans at XXXX due closures Our to change net now remain delays. permitting Applebee's net guidance primarily to openings are plans between XX for moving openings net IHOP planned unchanged XX of XXXX some to and

for Second, on our year range our expected we're G&A based the latest lowering investment progress.

$XXX Our to new G&A million $XXX million our XXXX to prior million is guidance of compared $XXX guidance forecast $XXX million. to

G&A this Some disruptions year of investments given will our caused XXXX planned the extended by the into pandemic. be

on next our provide call. more earnings around will XXXX guidance We

with impact $XXX our million restaurants. G&A our expected adjusted prior to refranchising million million range company we're guidance our strategic $XXX of guidance $XXX reflects compared million. to QX, narrowing our EBITDA $XXX investments in This along new continued to performance, between range Third, our to owned QX from guidance

million spending operations. our summary, pleased to maintaining $XX million. $XX across we're range performance Lastly, CAPEX our the In we're consistent of with

yielded value flows, both Our long significant to to term. again our investment generate return focused cash growth, over results ability brands. We and shareholders remain approach the confident solid at capital in

from on color brand. hear Cywinski we'll John with Applebee's Next the John.

on good morning, the year's basis, health post-COVID X.X% momentum sales and the and believe as important gauge comp to XX.X% with I increase QX last top provides sales three this a a XXXX XXXX Thanks, of for a an continued been year increase years On XXXX. versus to QX of visibility true brand. terrific everyone. Vance and comp the brand have Applebee's of

sales a this sales response I also we the sustained in Our XXXX This Dine three-year of the a Applebee's for success XX.X% Brands. performance. remarkable made combination the and calculation drivers; QX environment. best reflects performance marks to throughout comp marketing first illustrating XXXX QX were of history to inflationary versus tactical this vibrant decisions attribute growth, three-year

partners. our is from outstanding benefits completion performance portfolio associated the continue to Applebee's multiyear And our excellence with finally, the see of we franchise the reflects rationalization. restaurant Second

$XX,XXX between quite Now XX% quarter, this was per XX% off continues premise, sales. premise This split and remain $X business $XX,XXX billion premise to delivery. absolute than as perspective, on go while in to off strong to premise, with of weekly sales and flourish volume From I our at QX were annual car is essential weekly more breakdown was an QX. off side system equally in dollar the restaurant. sales success average

to In lead a analysis benefit perspective, promising Applebee's affordability, convenience, just as this drive-through the and as we category casual variety, attribute XXth awareness. addition, such and comprehensive brand continues a family-friendly, cost window our key begin From initiative. dining new metrics brand we of pickup very opened

attained value eating brand compelling unaided awareness an Applebee's neighborhood the QX all-time we as in iconic fact, high propositions umbrella. our in under introduced In good

approximately combination On will of restaurants new traditional development year, we ghost open kitchen and this nine front locations. featuring the a

combination a this to then plan in representing traditional unit We and in decade. to XXXX year, expect or XXXX, return XX We again the growth also to a new close of restaurants closures Applebee's fewest net restaurants kitchens. ghost either

our franchise is Business Chairman and Franchise second XX,XXX forward, XX company Group franchisee only returns in for with Council. also acquired XXX anticipate Thrive with returning Applebee's. annual we and that of this a rate an business eventually owning restaurants second U.S. partners partner Flynn by approximately Thrive of closure to pleased John has owned respected franchised brand. led the our restaurants to XXX Restaurant XX second partner all our to with I'm Looking Applebee's Rolfe, deeply Applebee's existing X% franchise in a is Greg XXX% generation John restaurants model largest now With the Carolinas. transaction, the report to

to our and In our brand we as closing, is assembled role gathered nothing XXXX restaurants of at this XXXX today to when this perhaps annually, we Michigan. was the around Applebee's the our align partner year do best celebrate franchisee where recognize are escalation Applebee's health the of operator performers. average Mark a Applebee's model to was XX unit from to system we and the $X.X first and Schostak at recently as more team Now business State I of in the in QX volume speaks relevance the with of $XXXX,XXX. Mark plan entire million in honored event. to than

excluding increase is five-year we For the forward extraordinarily this the remain business. challenged the to how XX% environment, look the positioned an over overview now Applebee's we of our dining Applebee's categories, I'd casual with brand Box than turn increase well the is same Jay like to double Black partners timeframe. as for this Even franchise sustained in XX% to more for over aligned XXXX. to call IHOP growth as

Thanks, John and good morning.

relevant consecutive posted our for more sixth QX as and innovation Our result. to brand menu as become our gain continues technology occasions the and quarterly positive well a comparable with on marking store fronts. more X.X% sales marketing in We

over of operating two our their back restaurants grilled Mega our towards all increased sales below offering hours $XXXX overnight compared were weekly approximately to modestly sales. of $XXXX with approximately supported franchisees X% two restaurants cheese the virtual work premise or the with over and with offering sales $XX,XXX business generated were either and is restaurants for go restaurant premise still XX% Under delivery brands restaurants quarters. XX/X. getting weekly opened restaurants full to nearly X% QX, -- is of over an Off the generating nine last Dilla. XX/X per XXXX We traditional also prior hours. of quarter and of Our standard average as year's off XX% business takeout by $XXXX In operating in and accounting portfolio to $XX,XXX. our the sales new restaurants continue Super additional The

Last strategic with recently proposition and two technological we're promotion Our the our options We platform offered well-received about pay successfully checks results. efforts. toast guests by our launch We've by close that marketing resonating of drove about two initiatives also own $X their and our the and a widely and out for fluffy to we new devices. most on menu value offerings. go a guests. French a partnered two through thick quarter our We're enthusiastic with accepted are introduced excited Minions through and

months the brand's quarter six the million supply exceeded approximately and deal with to Our International expand chain already. permit first remain signups. growth approval with on now program target we bullish point long-term development, the prospects rollout in restaurants. our X.X sale continues Touching despite of We full on our ended to And Pancakes loyalty having timing platform briefly and year in has challenges. its near-term Bank of XXX

The on new in one XXXX. timing which in year add years our issue That our change the expect more strongest plus gross prospects. development history. represents XX restaurants weighs We to a outlook in is current of of brand's our

joy growth We see To turn expect We playing and continued we QX to brings back we laid move XXXX. people's which are wrap several what for lives, the excited foundation to our and of our we've and about we've now John into the franchisees prospects. call to do. IHOP progress fundamental over openings is who made the Peyton. future remain to I'll up,

start thank your results and the and and with QX. morning John thanks thanks for a and patience for teams of to their Jay, to work uncertainty providing to call restaurant Hey, please guests, teams there working experiences us you their our up those that thanks now focus and we're the We for there when questions. to want why most. they is know And and be their in hard need food Jay guests. Vance, on line for franchisees, big late on tremendous that's our hard for great Lisa, our their our that, you and and this efforts all with great right and open And

roster. our One you. while Q&A compile moment we Thank

will Eric Gonzalez KeyBanc. from be coming Our first with question

is open. line Your

this today Hey, for get in due and think securitization good such have My and morning. on might perhaps deal increase question you still to current continue buy that you to interest borrow? about in so down in the the maturity you the or shareholders be so, ability the balance XX rate? of stock, the more importantly, move of a you to have that level interest you refinance months thanks then limit buybacks back big to right sheet, is paying debt the can Thanks. might it's able your about chunk it given of think potential the done a you And to amount talk expense, you where coming current versus your to that do question continue terms can

Thanks Eric. Vance take will that.

Good morning, Eric.

we called it up don't need but actually take I open of this any need refinance we summer, the and no you to advantage we there's make was really due only window now. So charcoal maturities have sense. that current to to know right mean earlier have

the market and volatile. we're the currently pretty is market So monitoring then

into structure maintain the is rate and flexibility taking we're the that financial liquidity environments our interest current So provides. and capital but goal to capital always markets account that movements

So, has choppy. opportunistic buybacks but conditions now it's pretty this we year today's with be market environment. fact evident net the the by of capital of won't continue I we'll if that but levels, million need repurchases, of improve over always we allocation. capital right been we given top to to -- done with leverage we've return our And buybacks, balance refinance it's $XXX especially may on one terms in priorities mean and that

Okay, some if growth or with XXX regards stacks can ask I about targets I if years correctly five up remember which the to out units over to next have fair maybe you to And unit XX to enough. year. it per growth, four there about XXX

you as confident the reacting particularly given growth due how so higher are to So my rate you inflation? question IHOP think related your do for that does pipeline XXXX outlook the you dealing the And year? permitting that such the lower is, you'll mean in are then IHOPs next the teens typical this this with system higher and to the environment pushes unit outsized are delays, timelines IHOP that to XX franchisees high still outlook rates since this you or out we in project still normalize, see see growth year

which was that this been to year into have is very probably Yeah, one to question. be over persisting I especially back we're this mean this loaded issues. seemed an Yeah, was since post our permitting year it new I'll strong. lot open going issues has take us. and that pipeline getting restaurants of most growth a and a is related of equipment We issues Jay. this quite COVID XX few we good started different municipalities year our some for did growth IHOP

our some was QX to slide caused that next year. into open of that's pipeline in So going to

little the we So help a just changed. excitement. We to restaurants economics got but of bullish restaurant are had that conference but our of franchisees, that global of lot lot new is difficult, so a will openings had far us environment know talking think The and amount move obviously still forward. as bit tremendous they franchisees have we've brand, you I IHOP a on the opening and of about the a

of openings an time. being other now tremendous that There's seeing that actually able So we're our at particular out providing this and down a to for go convergence. amount be advantage restaurants to of and take it's close people opportunity

think still good. a And of us I pipeline will will out very the into So next which looking I help is those future move said, like in lot years. year,

don't Applebee's? you why John, And address

Hey plan Eric, confident for we're in our Applebee's. strategic

news As little growth to pipeline, challenges returning be and and our you combination that rebuilding of any timeline or this new know we're may and about kind that of delaying great ghost the in bit. of either optimistic concerned net a is traditional be anticipate XXXX and near-term unit not XXXX

enough. Fair Thanks.

Thank question of you. One Truist. moment next Bartlett while next we prepare from And our Jake for question. coming is our

Your line is open.

has that to better guided aspect. for up understand one on for and the kind the year the you just quarter impact the release the drivers so I wanted down the My be mentioned from question. Thanks EBITDA. guidance or of the quarters of the and see in the It's refranchising. taking for quarter the in step that's a versus that for one lowering to I guidance was fourth reasons But for Great. implied the other -- on the first in G&A that,

the what XXXX, talk So, G&A impact answer is in if could refranchising part related those maybe impact including stores? it's Thank that of what and near-term stores accretive maybe about whether reductions the be of to some as you. the would the in you

Vance, take can that. you

Jake. Hey course. Of

Most G&A got on refranchising XXXX, owned company it for the quarter does impact QX of guiding it restaurants along our -- and we So, said. you and our spending is full couldn't effectively the you're with as little from year year our for of G&A current higher also it this from catchup but in the this on reflect the G&A by performance, But trend QX that trends our driven the and QX particularly is that seeing includes that we quarters. reminder in positions, is investment do with projects, is usually just QX than a open etcetera. other earlier we're

said And represent though not QX think so, I that does run having G&A rate.

product that details and -- development So designed and investments the pleased But more to certain we'll support as past the progress so make our in to we quarter. with in the in really seeing growth said investments continue in really we but XXXX, they're XXXX will technology, far. then guidance on people, we're have next drive and long-term research, we're

mentioned impact impacting refranchising in the release that And the that of EBITDA. could the was be it

a So, a margins I be look there for that think company your rate. would one would I almost royalty to at one

you you've if about I that those expect help there just XXXX on then owned to could million past is should related, quarter down related is and So G&A go by to right, selling in we helpful? stores, in the X fourth help would the that or what maybe from X talked be any amount, company the us kind G&A the of impact also think stores understand financials and million

a that XXXX we provide change G&A for of business week. last transaction the portfolio. color We XX really but refranchising reflects will and our we specific disclosed XXXX represents but company our anticipate guidance historically restaurants material the specifically our restaurants closed companies just owned fundamentals on everyone anti-product So that X% discussed reminding was G&A. more haven't I'm really On don't next [ph] year, was XXXX -- our -- that roughly

Okay.

say can so those there or stores? is accretive whether that dilutive you a refranchise okay, G&A to it's So, --

be the with next that budgeting more we more discussion we're year in will for our on we'll process There done that out. and guidance when will have taken G&A is [indiscernible] color and G&A XXXX quarter. next provide There's

same year fourth the seen improvement basis continue throughout wouldn't on Okay, store an I a and the there no terms and in we've comment the the quarter that about then believe in sales three-year here. be of underlying any comments trends. reason momentum think there helpful? on in would was business, to Is the any seen We've that current there just

John Jay that. we don't have Why on Yeah. comment and

in We Yeah only very with than Jake, this it's love aligned and is to our you momentum but the franchisees. years. needed we've confidence not upon, have confident our that John. as quite plan our past brand couldn't any strong higher be five our candidly plan very change We're when a as a flexibility been over the

on stride I six feel and progress to after had good think we the made. IHOP now also hitting very our in being we've we Coming quarters be the back about we our side pandemic right seem up now. straight sales

We great next that's that year. way initiatives of through out pipeline have planned we all the have a

we we're very we're menu where So going we're now would reason see marketing feeling for loyalty any and why don't doing with us or that or that lot about of what We've good at change. things right got our program. a

Great. I appreciate it.

Thank you.

for while moment we question. our One next you. Thank prepare

have We our next from Jeffrey is coming Barclays. Bernstein of question

line is Your open.

Thank you Two questions. very Great. much.

sound the fourth quarter quarter. following one into any either environment, or through it up first just doesn't The in slowdown the third you've seen consumer trend the on like

aggressive end I slow of potential Just what were just the as or marketing initiatives that's want well implement whether trying that you're already more as to terms accurate the or was increased to up size landscape sure response to one make trends wondering getting perhaps in on your might promotion follow-up. seeing or any and if had competition? And then competitors you

questions John Sure, Jay, for again. both and

Hey, Jeff is this John.

front, thoughtful have. momentum thankful the we Applebee's we're this environment, On very we the for were environment, in a that it's challenging

post over returned here lead at and our COVID months and that's past XX things the of time even contingencies XX to our built tactical having or marketing with initiatives, we least perhaps One flexibility in. so, the is happened year plans in

have that as and should a on we propositions got we those sitting We've tougher. shelf. the deploy needed, portfolio So of the become environment programs market can

marketplace, We easy and change short XX meet to have frequently us. on and only or in for partners. our reaction So again, pretty to the we ability -- franchise notice, response course, is

well. great challenged they're So very in a momentum, environment thoughtful as

to tough, IHOP. etc. does. competitors Hey when Jay things really start to adjustments is to business really ability as else the to, your restaurant at Jeff, We our hard is, do try about react make this We we what historically get to good need more feel everybody not discounting,

We need plan we offers the strategy we're and did And access to for we will promotion. value value by by have to we your have to of try of need make time. Hour trying for time we $X limited all always part guests. and the guests to follow IHOPPY a that. some We've our There's a our a program, use just got two ability two for two

had previously better we the new rolled doing for price compared plan also what improved also what really Thick on to French sweet We that ‘N to which our out entrees, menu. there's people crave, sides roll in side, And as And there's there's just roll Fluffy we Toast, executing plan, a we we're much two there's shape. is you dinner indulgent better truly a to full great that and proposition that confident believe new quality is our the plan, in We incorporated more going the savory side. be that well. we're that items, that new we're we're value

margin know we've this the pricing hoping touch -- basket menu amazing just if back mentioned you quarter and year, of in the were sense the on menu potential about get coming the suggestions, much counter just and year, follow to -- it inflation not the headed. on in half a where that bit the from wondering the just little your are and maybe labor each have I'm given what franchisees franchisee sales you next franchisees talk a in third how easing formal of and you directionally pricing to brands you halfway pricing, ease about inflation to if so you. in much you side? was outlook call through gone well, with guidance up Understood. perspective, menu trying it's could for a but commodity the And are seemingly or my because kind talk Thank quarters really think without up, I of hold and for of commodities think how maybe

Jay take and John, want again? that to you

is mean Sure, I Jeff. John. -- this

category to strategic, does front, group. They a Applebee’s with covering and leadership maintaining savvy. impressed possible in this are thoughtful, the lead margins quite with between Applebee’s affordability understand be They continue delicate the the to the sophisticated franchisees. and the our On They're affordability. extent balance I

environment. and And with So our relatively share it's strategic I margins long to them will they've view important to a I taking pricing. to in what's them expect necessary continue. said, in to that. to applaud With their in us, environment. tough been been a discussions they've tough as market and And a that speaking, conservative do been opportunity They've their from that term for conservative they date protect

kind year that on point is I to get potentially think think pressures. to side, I doesn't as into here the but really. mean think That a decline. still with drop year, rates of little year, inflation the and that start IHOP do place going no They're Inflation see of a half prices going inflation bit next to we pretty take the you this We to at difference year. back same going And some but deceleration the are high. stubborn dealing that this been are has little is

of year, the have already priced menu we don't the until our Now for year. another next menus rest are

a was on they've into them moment. anything whatever as get were we right previously. But, do, far that. at bit the localized. the probably levels has smart costs it where Until an But the other changing The labor normalized. that's afford we rate overcome price don't gets food off slowed out markets they they a they're as probably never prices certain little way the Spring, see don't to to more up rate down And softening possibilities days, you've regional down of and in think where as are such price, it's it becomes have your tougher. anymore. got you as going has to in I take There's help there. staffing used inflation because how guests come comes but to that but There's some more your decisions about Labor do the And city, their run economy done can't on opened if I little So tough needed incorporated of price areas back a unemployment of X% of a where that actually still very well. the to issue.

as So rates trying price, to come they where strategic being it, probably and as I price. of think about down as increases And careful well. will price they're as take be take decelerate they inflation very how possible

think goes do that I your normalized will think when a So likewise. inflation of the franchisees back I to price taking more rate,

there for brand? any that for on or quarter price quantification either Is third the fourth

of as the as front, previous kind it over on quarters think XXXX think Applebee's I X% Jeff, quarter-over-quarter XXXX. shared we've well. of in And color

environment should improve annual commodity I the franchisees conservative price at at I proven over normalized X% to back X% environment. cost do in to do That's inflationary time, it Jay's more expect be point expect case. as historically some what that will which the increase. to do has revert our we to So look this that point, to And

to QX more have is likely think closer to IHOP year-over-year, it I QX. price is taken Again the they XX%

Now when versus roll you is again, change. at we some menus as quarters QX look just those But QX over X%. the of print little that off your

than in and just half less the of Jeff, Hey Peyton, cost John the context it's the is increases there, two restaurants. goods XX% some price in increase into for X% the of brands

the their And guests has on price back what's been limited. increasing. surprisingly their So think pushed also it can it does with balancing is tolerate. interesting what they Increases really margins franchisees gets reflect

our cost really they're you their overall. it given store the to see that consumers same check, While can the from total tolerating of managing economy come have price the increases and growth, are sales expect

you. Thank

we prepare Thank the you. One for moment question. next while

is Our Wedbush. coming Setyan next of ahead, question from Go Nick please.

feel given QX there? really to in general, guess, as the value about do out you from evolved stance value peaks? Thank you. an this is gas like I aggressive then, just of the have value just headwinds ask in perception come inflationary And down prices environment, early necessary, how particularly I has wanted

to ahead want go you John again. and Jay

Good with C. you. is to John chat Yeah, this Nick.

franchisees value In end we do question But Your fundamentally think affordability, average their necessary. lower do important. spectrum. the think the is, see our margins. value important. brand, we lead I a value Applebee's protecting is We're I check is on remains that's obviously at will of dining, casual

have believers but their guests truly lots not are restaurant to Our of of discretionary challenged. team convey been COVID. earning exceptional franchisees the in income value. Quite at trust numbers of our only this obviously, their We're throughout ways terms and excellence in in big guests, there environment

our there this our like there's borrowed that's with go neighborhood We we added ever emotional lots equity. of been relevant are connection guests. more I think the environment. value -- results. in it's And deliver can ways perhaps co-branding, use through there's advertising than believe conveying evident there our of the to I to is in value, is

deliver ways believe I but there tactically are value that yes, is important, upon a proposition. So to of multitude value

is this Nick at Jay Hey, IHOP.

a for you have that is there to more from to always think you In more get bit And it strategy. the all certain on important. that of menu little and barbell extent want our approachable the items value them. It's guests are I expensive guests your value same. have to always But part more necessary. strategy call Value items, people affordable overall that are is guests. not so you are have occasions an

watch manage it they prices when They favorite pocketbook and are have what closely. higher they're to can't people income that Vegas gas costs. There get dollars more expensive, guests go don't though, item, into priced that their order do are have to We they that their things up, less scale care and that. other they

there's there's I the different is And a need John it value products. as for said that so well, mean value, all cheap very value. And time. necessarily doesn't abundant There's think of kinds

point get care to one can about, up your for personal value, extra how lot our for one those time value There's from limited opens visits the loyalty to food program motivate possibility a five money. there's values, of they and individuals. offer You on what

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Well, Nick tactical this equate is not I discounting. with would John value C.,

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Okay, thank you very much.

Thank you.

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next I you, for will question. prepare our Thank

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wanted thanks year-on-year. and John I strength morning, I I Good Applebee's the X% taking pricing to heard think questions. C., and say sales my for start you on

points guess pretty the the QX, related. this would similar could a could that's anything data of seeing also or you driving this benefiting think suggesting share question weekend can acceleration, the any first, the and I part on shift you're weekday trade you're that way or elaborate to but sequential suggesting you I ballpark that's down traffic be benefit noting to value perspective? is from what's sequential improvement confirm versus correct that you from day worth just to

Well to sure, Good hear question. Brian, that's a in lot that embedded you. from

business the I to. what tackle of attribute health Let's and of kind the that

throughout We and one excellence. restaurant at brand excellence, the recessionary retention time, restaurant Manager hallmark environment. -- and a throughout First guest and this pandemic level this foremost, General of has been a

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a Applebee's For a second experienced digits, take driving mid with that is a XX% front, single etc, reasonable I Hey, right, results for ballpark? inflation shaking can you. know, XX, the those can there I some you get better history, relevant days, about for half its It's in inflation what thank the that position that could second quantify Applebee's is you you so And reasons of quarter? I it know, you, today stint XX%. reach better sense my Brand. would first in we things on the to by expect quarter anything you that won't see half, statistics entire that third was than you about on half qX range other Brian, would can a the year then something quantify offer to say gave versus trying the degree understanding you've I know, inflation you fourth you argue, dime been, the seeing but on know into for has And in food I this you on hour. All What these commodity turn But attempt to which seen the you're I than improvement. brand. a everything in know, you of and over hour to the at past and is let or the very Could on few by and level set to brand. years trying was just was sort year out Applebee's? where get of see,

teens. I half if we're seeing months, because to started think both first just mentioned, next And then for inflation, brands for half close index But low And earlier, go as XX versus they XX%, about half to but so for different if think, as cost starting you baskets. think in five that down. July second John the you both I XXs. mentioned that commodity in know, John's you have Applebee's, and for It's second to the seeing we're that first half IHOP. low was the were And inflation the

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overall, gas stay economy. So we with long more get worse don't you and very the as know, moderated were in pleased as prices quarter and things the much

shape. in very we're think I good

that for In million and me. usually dollars. back the identify we're backs then professional doing Okay, rate around Right, know more business. for but just there's there noticed color you to there was on not add was one you EBITA bucket what provide that's will this any and that add two the I the this was third related last services other of you. half run Could color there a thank Yeah, or I other be quarter was around that it work of

C. GNA, l king. you. Thank I'll for Okay, of be so right. final that's would pass in you. Thanks, That's thank you. then Thanks, Brian. will Brian. that question that it from was awesome, I our wolf on. embedded Right. And an coming Andrew assume Thank

thank to up you. ask great, know, you lower you the wanted a and expecting that You now know, Applebee's. experiencing I follow commodity costs are the, somewhat at on

know, financial economic model. Just, you of the and company's sort

is out it, Andrew, company's sold through mixes to Andrew, talk the any good it's the I anything for understand that As us. coop Hey, glad any commodity Hey, through IHOP. the other that is there take direct way is Vance you. for company thanks joining Is only exposure or through the are or mainly the the to else? We're John, And But directly there call. inflation you're can with that. of p&l? impacts exposure

dry as So us impact that now you And has we about having rough our franchisees. on it's Jay close really the we closed, mix both said mentioned, when the through franchising through p&l now, had that, primarily to cost, now, won't was it as restaurants, talked it and well. it directly. company how But John impacts

quantify because some our of your we pushed to just But we is, of projects you hires go quarter. I normal a spend, we into research health some quarter about high know, of operating new was five and three much and And impacts, it's quantify There that higher we it do, reflects or Great, has closely, ask kind just know, can to that. monitor what macro and, he back. know, understand, he was the than just some to back of but our much of to care that of Yeah, of that very traditionally, we GNA help about so, financial plan to numbers do fourth the than, that do down of how include development the of quantify early Because that in in out or So said back qX, pushed cuboids, you and it's the the out you and Andrew quarter, before, third up franchisees. you quarterly this to back Just the the something kind wanted step Andrew? double help does though. question. couldn't EBIT? growth I And wanted you first sort hard the it. check the of because theoretical quarters procedures. does, off call. some health a how we how up wanted that kind the I it's on little know, year for know, but basic either much got cron gone got know, the lost GNA spend Does Could past, four maybe you was care But question, dropped year. projects that earlier guess, we I'll Yeah, look, it has but, flipped? Have that Andrew? which extent, I other if Da? as it's guidance quarter? hard that also, of those you third you the of Operator? quarters. the us think we step years we in hire into And true do a reiterate a slid

more call. There's John we're We're This think right? all more. the so Lisa? in over, with appreciate in like of queue. that the participants turn thank we since pain minutes Yes. no I today's you our would There's sticking concludes Is for call closing all I'll Well, Great. Okay, you that to back concludes to say I thank you. proud us. no conference. remarks. And the participant over just results XX for queue.

You begin may The disconnect. will all during conference to shortly your raise hand q&a.

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