Dine Brands Global (DIN) 28 Feb 242023 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Dine Brands Global Fourth Quarter Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your host today, Matt Lee, Senior Vice President, Finance and Investor Relations. Please go ahead.

Good morning, and welcome to Dine Brands Fourth Quarter and Fiscal 2023 Conference Call. include CFO. from will and Peyton, call Chang, Vance morning's prepared John remarks CEO; This

prepared Tony be those the safe President questions Following harbor remarks, the Q&A of Jay Applebee's; from information. call.Please IHOP Johns, portion and regarding of will remember community forward-looking also investment available the address Moralejo, to during President our of

different factors, During than results unknown in these to the obligation press risks, forward-looking context and and forward-looking today the involves the XX-K call, information of statements known implied. no assume actual update and in or management or factors, and expressed the of will and which are we as those supplement discuss are which detailed other these release Please information to filing.The cause be that is forward-looking may uncertainties evaluate today's statements.

before Dine on We to will to discuss our on calendar a described to to technically measures, in XXXX, call X, that, also conference which Brands' scheduled press financial John opens CEO, purposes, Investor over May are non-GAAP available release Relations XXXX website.For and morning earnings host results. call and are to Dine also is our the certain we to my that QX turn refer With it pleasure Brands Peyton. the market the release

increase significant was brands, plans of Dine's to work-in-progress everyone, and provide strategy and quarter detail financial allocation our for year fourth full share share and Dine. openings, in pace the today's XXXX.XXXX for results, outlook On and discuss year will for Vance discuss our our will morning, current guidance capital a Good results. I thank you us. of for call, XXXX I'll restaurant joining the

of delivered First, another sales positive and growth. Applebee's both comp IHOP year

XXXX was comps. of Applebee's, positive the For consecutive year third

Second, growth. year-over-year EBITDA we generated

experience portfolio.We contemplate while as realizing to Applebee's concept gaining system, returning $XXX introducing bond our restaurant dual-branded and in the into back to and Dine internationally, the finally, knowledge an we we potential to Fuzzy's add million long-term debt, our our integrated our investors. we Xth U.S. And opened emerging high-growth objective brand Third, IHOP, equity this refinanced

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found needs with the innovation that and economic top the response quarter. to guests value-conscious our guests mind.During our we fourth As we we their in advanced of continued in so year, this the agenda, spend behavior limited discretionary did that of pressures

that leverage are for delivering certainly conditions, able known value also are dynamic at exceptional challenging and the highly our a the promotions of it our built year All environment. allows We in our Eat we You guests Wings were deliver brands. to calendar and value-driven to time intersections compelling that We visible guests Eat throughout that creates ensure While even an and guests. Pancakes.We remain IHOP's know to our the and price-sensitive in it and will Free and to no You our in for our guests. is limited across Can All surprise appealing LTOs why this and consumer Kids market in expect a delivering DOLLARITA brands cautious meet for campaigns market XXXX top-performing our us we're exceptional expertise and grounded Can included XXXX Applebee's value.Our offers other That's promotions strategy planning differentiate experience right in our offerings it's and the us abundant with successfully our the and and consumer insights Eat

on capabilities.As to stepped into recently addition driving development also we our Scott traffic, strengthening Development newly our In Officer emphasis development announced, and the created we'll Gladstone place focus coordinate has will of strategy. Chief on particular our role

Scott the to thrilled his our more to as in I'll detail development as strategy financial million work Applebee's XXXX, same business analytics the from business will our which a inside his highlights. key strategy, the continue insights. out $XX generated EBITDA call.So In out up serve and knows with quarter development million in walk role. of our Dine our at He's our that, his QX, $XXX $XX.X in as we consumer well in $XXX was to in Scott's from million build compared XXXX. in have our through to later discuss last are We work on and of In year. EBITDA, capabilities was veteran, international Scott business.I'll who leader time and million

October, Applebee's to of XXXX's X.X%. and in free top in the XXXX, QX of sales sales. the for slight was decline cash the positive our flow DOLLARITA a for year, QX comp an adjusted the $XXX.X growth X.X% of million XXXX's promotion, X.X%. in quarter, growth which on cash X% was IHOP of of promotional of October for Applebee's maintaining sales and full in social sales which comp it a momentum And drove X.X% from quarter adjusted importantly, profitable comp X.X% was negative were full more pickup Applebee's of and now of mindset of comp growth And in traffic of year of achieved black $XX.X XXth Applebee's our QX, success welcomed posted it and free consecutive traffic media for was sales the QX.IHOP sales comp tapped from refranchising sales into full its and delivered year strong up reported positive X.X% highlight helping DOLLARITA The outperform comp of in up by revenues in and by million.Turning the supported in was the comp traffic. positive Excluding and QX. because Applebee's our drove guests with XXXX's flow box XXXX, units XX company-owned X% our strong improvement franchisees Applebee's. sales increase

in $X this had attached.DOLLARITA formula demographic reach, purchases whom to over at forefront top-performing along marketing we're and first items younger new attributed pipeline mezcal or the Tipsy partnerships. and attracting marketing in of item for were expanded many Aaron QX also Dos increasingly continue being full to via increasing In which successful brand of the to and the fact, tested time. age XX% weeks the builds to our with success as XXX QX essential, Cupid crowded mindset menu and guests Moon. partnership by nationwide be is additional of our execute in we culturally calendar. Cranston of a Paul's recognizes promotion.Applebee's We start on Hombres our QX. Applebee's DOLLARITA exciting an number of Mucho XX% mines evidenced group, is of our will menu our continue Bryan menu to guest has a margaritas, has now promotional transactions with X and products on-air The and new of LTO the of Applebee's concepts out also culinary an want the $X why be This excited space and new team We'll on relevant an Blue visited the to of rolling launch in DOLLARITA

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new initiatives of drive our this business. to segment have We

Bank week moving we Our progress results theory optimistic our Applebee's in bringing time the and job the truly Last surpassed delivering and when success International technology over X.X XXth people. the based XXXX.Now on was its positive brand the Applebee's market. sales a growth our new is more increasingly innovation, menu and of IHOP and IHOP. we delivered to build-out comp embarked innovative frequency technology quarter brand opened value-driven continued own positive members X restaurants and of first marketing last investments We're marketing year, our bit in the for last loyalty quarter, an to for loyalty iconic throughout loyalty the have XXXX year. loyalty to XX domestically of million IHOP total of weekly and and propel members, sales. by reflects In the new to a in $XX,XXX fourth over consecutive the performance in on enhancements this to million about consistent on enrolled deliver this on drives on is expect growth expand we program.To build menu, the our Pancakes, December we Average and it program, that goals. steady

twice all of XX% will to for breakfast benedicts that of loyalty was ] IHOP's categories average, total and Our approach less to to starting X,XXX in connects at more the I the ability performance a our both [ dine-in loyalty America. being they there time approximately recognized items on best important the visual and and industry sales we Newsweek the of as app beginning just much crepes for upside are, with believe additions and items, the per of guests, value. are on an basics the XXXX.We're here. of design row, to the nearly IHOP's during loyalty added in program, menu loyalty as for were in is members year day the their lead personalized second sales quarter surface incremental refreshed in and omnichannel for year that times toast average, French fourth up and of learn program's dinner, promotions non-loyalty and These and also growth sales on the scratch including quick of the spend, downloaded sustained X.X% than marketing.XXXX often the X% the members.The IHOP, marketing, purchasing new menu more our than IHOP great to drive from accounts of of as habits nonmembers winners.On of and members loyalty the the and focusing one terms award X% traffic limited the also categories. knowledge menu only marketing with is Notwithstanding biscuits visiting program more our new we're the

a menu example, awareness inspired that with and partnership enhanced drove For fourth included Bros. film Warner brand Wonka our sales. quarter limited-time

In XX% Black front, the dining Box campaign.On fact, out and have sales and of X Wonka implemented comp of new outperformed weeks family X POS QX's our system server restaurants tablets. IHOP technology during and IHOP the

Momentum attachment also data a franchisees Our and higher tablets fully that time, in ticket advancing for year, servers.Last Millennials. as of to server dry consumer-packaged one the IHOP with media have higher new to Coffee experiencing Z beverage marketing over-indexing enabled rate, our Kraft made improvement IHOP are significant preliminary program. Heinz, up. launches became tips ramp our According their in continues average Gen fastest-growing social in check coffee, shows that support and grow and goods higher strides

up strong and Overall, Fuzzy's. resources. family we now premium history.Already Birria Shrimp new its IHOP here, and Bowl QX, as We're XXXX Taco for IHOP iced year, Fuzzy's ongoing supported innovation is and set operational decisions. about step Dine and QX last that category. data-informed momentum and in best Additional in the formats the International in Applebee's its and opened in sizes for openings January has XX improve making had are offer year, XX to expect our new leadership Baja beverages in its gained is all for XXXX. last pricing on the launched to and enhancements.Turning Leon, a with Vance. prototype provide continues that in at shared XXXX. also will brand's continue and well to we new the the with market which we portfolio this compelling to from Applebee's lattes in a international a as IHOP hand smarter XXXX, menu Fuzzy's the year newest total and Taco Fuzzy's Walmart further nationally Chicken program our the XXXX, are The lattes restaurant our opportunity bringing IHOP across the in growth innovation in we've underway to The year over year cafe-style X home, exclusive solidified Margarita iced of of on we performance. Mexico in new-to-market And track Baja tried brands drive expertise, Fish the We're inroads and such in looking Baja younger of was call launched dual-branded since existing added in cross-pollination QX is were and by of highlight traditional and and now Xth largest I'll that, last pleased consumers.Kraft excited insights one and Heinz This the dual-branded are applying of Starting to innovations flavor distribution menu details represents XXXX, QX. Dine Fuzzy's been process Queso markets.And net more to of optimization LTOs Mexico, restaurants.Our tested portfolio.Alongside division in franchisees with first resulting finally, and is course, benefit perform opportunities and its Taco, Elote the integration to markets Dine and analytics to life including in new growth integration, completed being

a Thank you, performance John. XXXX. we in delivered Overall, solid

revenues [ Applebee's Class we operational have fourth X momentum a years million flow, shareholders.Our exceeded free notes in while sales at IHOP. on the which successfully and EBITDA of completed In basis, of addition reduced continuing due return to guidance, of We and sales positive were declined significant to leverage the the to to our million, refranchising X.X consecutive $XXX.X at refinancing to comp of generated primarily units cash year-over-year X% $XXX our ] we Applebee's A-XX XXXX. gains, capital continued of quarter total the company-operated XX October turns

full year, Excluding total total refranchising. in revenues, lower the up was refranchising, year, have which to we due would quarter primarily X%.For prior the million than $XXX.X been revenues again, fourth X% generated the

year's XXXX exclude from up due of inclusion Excluding revenues with full G&A the positive the in of Applebee's in of last year-over-year the we XXXX.If QX the of million Rental restaurants increased related XXXX.We compared compensation $XX.X operations, the at refranchising, due same full in which of revenues EBITDA for of consolidated same and $XX flat quarter quarter contribution the segment from in we the million Fuzzy's, Fuzzy's the software Fuzzy's X.X% and with XXXX results. acquired ended the to X.X% and increased million year quarter resulting last quarter $XX.X December compared IHOP and expenses, revenues, from of of in advertising compared million fourth the at and $XXX.X fourth $XX.X increases to IHOP to million maintenance refranchising year's and to costs adjusted quarterly of $XXX.X cost this remained generated by to revenues the X% transaction flip year last quarter million stopping year.We was comp G&A sales XXXX. franchise for for $XX.X the revenue costs initiative company-operated for related million of offset acquisition year.

full higher repurchases.Turning increase million to EBITDA expense XXXX, Our and the due interest our free share adjusted to million.Finally, usage primarily per our $X.XX earnings is and $XX.X were compares per segment of We increased from flow up year $X.XX $X.XX quarter $XXX.X share. fourth guidance $X.XX of last million per to capital. in share XXXX $XXX.X of favorably EPS per This our quarter the balance was for million diluted an per and respectively, share we of XXXX. of ahead statement, profit cash outpacing consolidated Despite last XXXX. share refinancing, in from our for fourth year's in share flow $XXX.X and benefit adjusted cash strategic adjusted and sheet generated

XXXX year million capital $XX.X The to in $XXX.X segment at full and Our million with in from increase working profit.CapEx an change $XX.X came increase $XX.X the for in compared was due primarily favorable operations to flows compared was for cash million in year. a prior XXXX. XXXX million

CapEx the CapEx. lowered which $XXX environments.Regarding compares unrestricted combination and of of buybacks. We of business favorably the capital returned XXXX improved quarter does dividends total a also number cash stability by XXXX strength the continue the cash We third received, will $XX stock the generation, we of testament $XX in reimbursement with not allocation, we and X.X that leverage and shareholders to due effective to remain Our which EBITDA cash to strong ratio is This growth model capital turns million ended million end to a of our in have Dine's million disciplined. challenging TI to through $XX million. reflect of of fourth quarter.Our at unrestricted

which for important We refinancing. evaluate sheet.In know the we that of system to while $XX,XXX, X.X% were Applebee's debt healthy including that, fairly growth the XXXX $XX,XXX Dine in demonstrating our is from $X,XXX weekly their total is year-over-year. ensuring XX% versus and and that which XX% in to we invest X.X%. IHOP and mix system close To $XXX.X capital bondholders the and capital sales over our with costs a delivery. XXXX. is growth XXXX about $XX,XXX, from sales buybacks continued returned and we X% system delivery.On Go Average optimal business or X.X% as approximately of of XX% also steady of sales, $X.X sales addition Applebee's to and same-restaurant average momentum positive is Applebee's from sales dividends reached total improved our have X.X% year by sales the shareholders from return sales front, maintain XXXX of to In little to in XX% or improved brands Go XXXX, buybacks including sales, commodity off-premise of a weekly from To over same-restaurant commodities through increased of were a continue balance IHOP's have. remained results by scale versus off-premise commodity collectively in billion, ago and XXXX sales XX% from is million costs QX

the supply XXXX, pleased projects savings our at expecting bps. for the pre-COVID in pre-COVID restaurant NOI we're the the improving, continue is while We're collected its at it percent further to to with franchisees.[ CSCS on the similar seeing both initiative. side, this levels to cross-functional that to sales couple from is IHOP make chain food we scale franchisees, we're In up has $XX NI has new for gone XXXX million Applebee's to the have inflation. our relative with restaurant XXXX over results Our continue declined and to deflation, ideas a to at at IHOP, sales several years, both to flat identify in indicating steady progress our with be still in peak food low-single-digit a by of brands pricing of on is as ] brands.On improved tailwind and for staffing flat levels labor potential range partnership approximately wages franchisees. franchisees In in resulted the CSCS, pricing percent as our initiative low-single-digit and and of co-op of leverage but and Applebee's savings XX data we about expecting elevated labor from last future.Based in remain we've implemented of profitability actively levels

power we continue efficiencies. continue continuously which drive market support to we our and stabilize to co-op mentioned, basket to CSCS, additional equipment.As of cost expect food brand's our leverage purchasing to However, from savings cost to franchisees in we'll the evaluates XXXX

Applebee's domestically QX Lastly, full year of to recap XX IHOP restaurants net numbers, in in had of XX development domestic XXXX, XXXX. which were in QX. restaurants and closings XX opened

and to spend XX of to place, restaurants to restaurants. close XX to new strategy development, discuss footprint anticipate new For domestic call the In into of XXXX And system-wide our scale to We to of out net openings between our G&A range for a $XX turn X%. and net full restaurants of range to X% to of $XXX had discussion Applebee's up back comp we're depreciation our XXXX. expecting the XXXX, our brands million, to CapEx to of John? XX of in $XXX IHOP domestic million continue between I'll to million. noncash in development open On domestic sales guiding a brings million comp sales me reintroducing year, John range X%. expecting sales restaurants We're year this range a XXXX.As guidance to today's approximately Applebee to compensation the guidance. we our we're $XXX in XX feel ability XX X% we're We're expecting fewer comp development in time.Now domestic and mentioned, approximately net and we're and million range new to With IHOP strategy to domestic confident $XX including be earnings. the EBITDA, over forecasting further our IHOP's system-wide $XXX to million.On XXXX John stock-based $XX million.

I'll by more efforts. wrap development bit about up speaking so our Thanks a Vance. much,

generation a the footprint plenty capital, at the start execution said there to call, strategy We that our as use we cash believe of on flow and we result grow development.As enhance of is X prudent that and fortunate I able global of strong opportunity to healthy the the are position of our in our are of sheet, balance brands.

However, a our nor one-size development for solution brands, is our for not franchisees.

Our have starting of points and each brands focus. different areas

IHOP is the focus and growth a which to segments prototype largest unit brand the count, by upon net track developing brands on that openings.As are has Specifically, an return brands Applebee's on in record with a to both their ROI infill conversions focused of will build. respective opportunities. unit

reflecting week, fact, agreement to markets while and goals the develop leverage to we into This and to recruit markets, the franchisees have international In new this in approach plans Flynn Group, same the Applebee's tapping new is IHOP an largest their reached franchisee, new our X our our is also needs. franchisees dual-brand next attract also years. and different our franchisee with develop approach also network. XX restaurants over option.Similarly, Fuzzy's our franchisees With the

permitting are marketing. process and Others preopening estate with different real desire forms the for opportunities. Some may the some looking need help of may construction Others financial while help support. assistance with finding need

make over reiterate our the my in value. outlook iconic by environment.In our our growth members of current attributes is positioned and thank to spend.So that questions. delivering for are business. Dine these and in sustainable that, create value scale return note that for want with brands, with franchisees.And franchisees abundant model, a to not cost further XXXX our asset-light structure up, up remain term We I the within funding brands that which specific strengthening our shareholders I economic for by us impactful our in methodical the and generate long for franchisees.Lastly, profitable in known Dine XXXX costs the for for our the to in way important to strong more guests wrap strategy in are overall it's the will targeted a recipe Dine's the performance the and our investment increasing we're development operator our existing confidence in our address reallocating to so all open needs and We're our environment and to growth development will our an and and expertise will team call analytical price-sensitive, uniquely

Jeff Instructions] the comes from from first [Operator Our Bernstein line Barclays. questions of

of couple A Great. questions.

wondering or it's consumer you could I The first, I definitely follow-up. comp And I that trends. just about if whether you're I have a you XQ, the say, behavior?I any change challenging even about quarter, you was therefore, through comps change the then trajectory whether know reversing the seeing getting first to there wasn't mentioned was you trend quarter thinking weather. And in was the quarter, in quarter-to-date, should any mentioned year. think positive negative throughout more the positive first whether to at expect in Applebee's and environment. sure the reference the I back despite that a a talk

Applebee's the And And Thanks for address about in It's about the trends Sure. John. will specifically. question first I'll the the comp trend question. general. then Tony talk you to

traffic our competitors as on tough, trends a But seen at then, and each The through improving throughout all Weather the week said February. January. hit took February, -- we've in thing. the January eased in many of So were January since the of all of same us right? people, known have toll took end weather the you its

I And specifically? right it's to in direction. do Tony, heading think the address you Applebee's want

Yes.

is in the our confident we're years. over Jeff, of That plan the for So X the rooted year. last confidence our in performance brand

delivered 'XX from said we and the positive 'XX. 'XX, As comp sales in outset, we've

that bodes for think I so well 'XX. And

mentioned, there of in looking John As repeat success the to headwinds 'XX we're were and 'XX. But January. some

renewed we and And we our strong a centered operational in drivers strong improving innovation around a centers disruptive another year. plan starting of there's strategy QX year efficiency off-premise enjoy comp We're on really got new aggressive execute growth. important we of our what of business.We've and really campaigns needed promotional sales should X on tactics. with are initiatives, against focus our rolling this believe menu value. those business If really Our out much marketing

switch growth. then, should I'm curious as pushback white And franchisee become the But development to about to your get disciplined but We know just going unit some unit the mature, about I definitely a lever unit not expect more and know forward? the you net assuming headwinds. to just there's whether trying Understood. Applebee's growth net opportunity? a or you you more been internally have international -- some John, a international on fairly up talked net brand, system is back to we when size expect there thoughts space that greater to growth. talked of could U.S. Applebee's dual return to

Sure. Thanks, Jeff.

it ago changed. talking X years Applebee's, will Applebee's. growth. absolutely is has when started unit that of it we for than first net to the to in So cost about particularly The world goal The was our world return build different that, because is today

And very X is more offer belief so scripted that's of prototype for now most week the franchisee's and that is deal new the we've for. can franchisees that are focused and importantly, We're work our for over with in a that the to the ROI great its and the on Flynn right detail with we next them just important brand an has in remarks for largest indication assembling that years, looking pivot that a doing Group focusing underway.Applebee's together to and Tony is future. and development commitment restaurants And to which brand. an our Applebee's on we're conversions, mentioned agreed XX this a commitment

X back international, in that build eventually introduce nurturing we're we brands. the right a when and comes is to concept.We this what big next eighth opportunity front the that dayparts. what the for and combined The size it So was there or the one of what is blended Leon, average the pioneering box seeing a the our as dual-branded to opened of to the address intent it. Mexico, unit the where you'd Xx brand because it just internationally space we've couple is U.S. net or really with we're X the That's is brands over And that's expect City. concept growth. for brands. outside X house to Mexico dual-brand before, return and on brand we restaurant a Applebee's for house innovation can what overseas of other bring find for got to to revenues both to that shared And the we're same is years work more do white is all When the to the pipeline

on money you back that usage think more think the you're as range, range, yield I the whether the spent yield I that now buying at mix a lastly, the wondering in where go from above share Vance, cash your such mean just peers. sounds thoughts I'm X a better about valuation. your in curious be dining perspective, here? in 'XX -- the leverage expect low or to you're whether you're contemplating shares Just credit for from pullback, mentioned now dividend But that well. whether about might just optimal casual the is well X.X% talking like you you'd turns with getting It the that's

Thanks for your question, Jeff.

allocation capital Our priorities the remain same.

capital we've on paid the as kept we the the debt X we've over the million yield strengthening you trading.But optimal that our will we've So is time. balance between important do right are returning protecting return while we more is sheet reflection on years same of yield now understand down roughly our $XXX we done buybacks dividend and ratio how in a capital and of stock mix and the of shareholders opportunistically our past the shareholders. The the to and million. payout And focused referenced, focused dividend we're done and the past capital to by return X where is $XXX in at same dividend we've our

We So capital. meaningful we'll returning trajectory. change understand to think that it. importance of No the about we continue how

of comes line question next Dennis from Our UBS. from Geiger the

Great.

the incidents you in if speak the to to had and quarter value the more the reception one, maybe that First customer you fourth value at curious little a could Applebee's.

DOLLARITA I as think Can then you you new customers just being been that stickiness and were think just think of historically? has you it the mentioned, value I of us was somewhat XX% talked or promos. where attributed remind on to I those to sticky. maybe occasions, the And LTOs transactions

more customers that occasions? for potentially value of on coming So the stickiness there those just kind some anything keeping on in of

John. remains bit At our to for attracted then Dennis, that. from brands, a Yes, guests highest to our ask both environment the perspective, are I'll a Tony level, will well thanks. more give little It's XXXX as promotion-driven start and and detail. you

So we share. as fight a XXXX view for market

out. LTO been more in seen a making up less you intent out resilient add And in it's we're their Applebee's. XX% XXXX when also remarkably that as for finding and about our little We portion they Tony, but behavior year? in when X guests can consumer to seeing dine restaurants, color some in menus, about drastically bit choices out.But portion have our where our whether dine our we dining not to everyday is of the are quarters, value 'XX well terms the perspective Applebee's approach over a the They're often. earlier haven't -- or what like to so. points that you for have of continue from are they to That alluded value are about they is

Yes.

So a couple points. of

well, Eat the answered you menu, points menu abundant of You really is asked continues little has in to tends go we stable But some the campaigns. Can promote a fairly share of value our XXXX. to perform remained of value our bit that. when One John All about but up I It tickets like the value think

DOLLARITA also You stickiness that's there a it. a standout right? to about think is asked of associated success, DOLLARITA. We level was

X.X XXXX. it love are. order The back DOLLARITAs XXX day. in more than Our with about the October. originally guests restaurant we was per as importantly, That's absolutely it the are million we franchisees, ticket We of than promotion.And more month thrilled in per sold our incidence launched higher as

all importantly, And a exceeded targets, in it perspective, scores. product frequency, our was internal of incremental It more dollars. internal margin financial franchisee incremental it draw, then drove tickets from sales, whether exceeded DOLLARITA exceeded it targets. brand our our value, all-important So the

dollars, menu are is Tony, promotion number franchisee share, a is for right, looking what franchisees a included XX% like And our to in of tickets Yes. which those it's great which item, exactly speaking another that of DOLLARITA margin that.

Correct.

Great. Very helpful, guys. And then just other. one

talked increasing air. about weeks on of you think I number

relates 'XX, a anything the you're maybe and there to Just you curious I from frame perspective? that If marketing share it time years prior frame things versus as looks air what 'XX weeks anything number of but year? up, to to doing the forgot on this highlight like if

question for good a Tony. That's

too absolutely. we flat this not across year the much Yes, XXXX. promotional total revisit But necessarily into more. more just windows. strategy. versus to spend, our detail marketing on it's go I'm not going our spend spend spending and spreading We're We're relatively annually

to for our advertising we add on-air allowing strategy, is strategy year still maintain our additional the our promotional frequency while us and So reach goals.

see promotions well. You'll year more uptick this digital in an as certain spend on

Our next question comes from from the line of truist.com. Bartlett Jake

a -- my Applebee's it really negative the have pretty on implying first was mean in DOLLARITA the it in And very expectation more gotten then But same-store strong trends. follow-up and positive confident after the was like you you're just on sounds sales that same-store October with is that. trajectory. sound a sales current read I the would Mine quarter.

you're kind in is So seeing December to is November, what that you now? driving from what what improvement do saw of driving think that you what --

And I driven want give for that beat Applebee's it think innovation, can't the Yes. helpful DOLLARITA it's gives to if period, for you the Black in We speak a Jake, et little plans then, also John. The on bit to you is cetera, that you December. entire the Box about year it's yes, guidance But I by specific the and confidence through was November one Tony, mention menu that year. softer promotion. October QX. we around thing

Yes.

Black did traffic me by saw and mention the quarter. going let there during QX it for Box outperformed We the back and earlier, to start what I So we quarter.

obviously underperform So that. we successful. pleased But sales.DOLLARITA were with did was we in

promotion holiday had our December, it and November business drove earlier, mentioned I it appeal. As during limited in October. combo But

guests value offering. what that so told stronger expecting us that were And was

we'll color in It give So an of you also on see for more wallets. continuation obviously, that making November more seeing we conditions a and of guests although of into in which XXXX.I'd And macroeconomic the by decisions were impact We're are our our results that -- that that and spending had we'll take selective seeing impacted bit has were we we part discretionary December say QX. is when learning, May. holidays. confidence a tightening their following did and in February report QX, And trend improved. January little

that full at trend sure for wanted we year, should just QX be, of Jake, make the the we did year, we're the you gave you that we're specifically. last not specifically. give how is what will guiding but a over, look if how that guidance QX on not comping to sense And

And that implying because to the clarification that is throughout not that imply reiterate to each what to good 'XX. a was is going that's was that make that but throughout said that... me, No, just it -- kind to implication, you just not positive quarter, sure you're of to be trying

That is what trying. not we're

right. You're

being maybe not I'm by it. closures IHOP. But we're then costs. just And maybe understand like on an development. acceleration economics sure it Great. Great. Got seems the Applebee's. the pressures yet moving fair we're pieces the so if net seems at unit lower you was amount you for is a build margin or the the also easing are of kind of what question impacted that clarify seeing other of development closures I continuation labor it But what and a seeing like given you provided. of the can on closures, metrics kind the at commodities development -- of

IHOP, level the point. about is openings on building mentioned, what on you elevated roughly at years store at XXX think driving X closures?And So we that I this Analyst ago then Day, were of that roughly talking

about talking we're significantly Now less.

less that yet -- is expected about things just are It feels year have or the is X we than the changed? development have confidently talking actually a development, biggest much like you're the even would what So fairly what ago.

cost in the the talk contracts changed of also to ways why like Jake, on when go the IHOP several terms financing, pattern specifically for and it's don't Jay, that of environment to Tony large process. Yes. in and cyclical ours comments I'll the expire Applebee's brands say renewal about of you closures? we'll availability just and then of and restaurant the financing, John. the a has cost briefly build

Jake. Yes. Thanks,

we just we've John XXX might grower as ago, have people post-COVID a changed a steady said, but had and restaurants well. environment a overall, cetera. steady and we sales and hit rates, as pretty pretty inflation viewing comp clearly, a number has been been We with how IHOP, developer. at XX and things, past about that net year think consistent and not growth years this opened the interest talked while et significantly have the up I are been consistent have going But few stable

So we growing. are

pipeline a all into kinds having have are this recall, you headed good of issues. we -- do were We year.And if we

think next think our to and too accomplish probably time time lines the the to in new that to guidance our but shouldn't are year the next this at I at looks look always and we them be year, there was push of delays. more think we're we what And industry given. roll this this now, many into this year, and just that probably that's that years, really when that's like year into we're going of be in looking on with how year.There's permitting normal we're the kind into so I thoughts. line accelerated guidance able with we've that's of all We new think was what some trying much now about with couple And last the our build guidance realistic and let's normal.

Yes.

-- this me is Let Tony.

little a Applebee's. more add question on bit closures for the color me Let on

our we're closings. pulling a positive aren't Our more Applebee's. is underway, that every that decision prototype closures closures, build really can an finally sign decision. for lever these It's and can so and offering a a a team, add initiatives we franchisor attrition X% are now of structure, That's to net a to new franchisee. are these pipeline of that downside What areas. last the And leverage between resort to to we They're X% a trade a incredibly a return struggling new of development a need openings assure the our mature like sign that have struggling system. for you rates closure new like leadership of franchisees. difficult Closing the growth.I'll is normal rate we offset do of of restaurant I robust unit leverage the brand

So closures franchisees our we'll openings and net build growth. unit us to with minimize back the to work get then pipeline of new to closely

Gonzalez Markets. Our line next question Eric KeyBanc Capital comes from with of the

first G&A, the range X% on we it EBITDA to to than expected X%. you're X%. The flattish to to outlook. and flat, appears be what about be up expecting implies bit up to is a The higher maybe maybe X%

low-single-digit the you're So that on to see means comps. going not much I think leverage

I'm that So the you just to wondering if upside coming EBITDA from to could range. be where point us, might

address that? you can Vance, Eric. Thanks,

starting QX Of -- upside the margin with in trying seeing The we've is next investment growth we're see that the course. year. expansion and EBITDA like to the the we're to it's we're the that leverage -- Remember, to for spend. made seeing -- this we're is the continue exactly investments outpacing accomplish is what to asset-light right, and believe from what we're to our model,

just unit development. isn't growth comps. in It's Our

happening. faster the revenue the other Eric, seeing By line -- things the we're driving collectively altogether, is are and margin channels way, you're we're improvement have we the We that where top invested on.And right, working cash expansion G&A in. the that the growth that's than in those Altogether, flow.

we're done the we've the that more done we're seeing on of CapEx us implementation the You're sort or point. all forward. just investments few fruits guiding at the wrapping this in we've of past initiatives of going the result work years less -- of lower of just technology That's realizing the with up and

ask you $XX be spent that outlook, range you to to in that it year. I $XX it, $XX to going million last CapEx Well, about going but think the we that I new versus my million rate? run that Is was could be expect before follow-up Should answered million forward?

think investors the accordingly. flow year, of this sort update return. and as to rate ideas, new CapEx for far. we've the we run made we We that we're benefit the have growth that rate. and to is new But is think Yes, investment right that -- in I we want right? so drive is new run We'll projects cash this I of just -- look, vehicle, realizing invest initiatives use a And

And outlook. the so about we're really excited

from Setyan line of from Wedbush. Our the comes next question Nick

evolving guys You both about an strategy around LTOs. talked advertising and

I the about the with of you weeks about weeks just think TV. and I'm the mistaken, as of quantify to where also not higher if coming guys as talked there higher not growing value know spend emphasis Is on -- you the number talk is you with TV the much of of number mean spend of ad dollars Maybe I on mentioned sort or the LTOs, bulk strategies. on sort greater the by higher holistically What incremental any least not of do at greater And number growing LTOs? value? ad from? much, way

proprietary higher strategically then a holistic level you Jay of and But promotions is many specifics get clearly we what we're don't It's around John. method or about competitors going and A strategy Tony sentence as Tony our at can we're to without where to their because not promotional want giving secrets. certain talk that. our spending behalf know how and blanket on that's dollars certainly will be away said, Jay into or the

talk So to first, promotion we'll Jay, you why strategy your and about Tony. don't then go

of comments Nick. doing amount as you just LTOs, money question, What of to we're of your far we're Thanks the for We're number question the stable pretty far the John. referenced, as Sure, as and cetera. think I Applebee's pertained most earlier. follow-ups as what et spending as

promote, as new barbell pull to great able really and believe That's to the that all up to believe year couple more have and been marketing But to we promote a promote.And or we put we different business. great go clearly, times feel the we've where a loyalty we we're direct and So drive our we it's we we have sales value when heavily and gives right keeps et additional to us that value on XX channel and running. to quarters recipe have of we need a we strategy path appropriate them. can that strategy growing with year strongly EBITDA us menus same are things different innovations as that new in items and we execution opportunities same is being been levers doing same our down And repeat we we've innovation. and on get But time maybe the far we've and up, the we're have running and doing one-to-one innovative either the are times that new with those gotten guests we and we throughout going of strategy in learn traffic we cetera.Clearly, as roll. who on continuing that menu, been great a being great have the for marketing that's straight marketing in us set values We improving new going the up they time got sales. activate at full-priced,

it has engaged you've when got to the be In discounted that strategy more key of of are just a But is along becomes same always based remain right? We've differentiator.And where this the environment, Look, promotional the to strategy, experience part Yes. discounting, lots in promotional balanced, that's known pricing. brands than in lines, menu innovation. right, it competitive value, is our been the affordability. for to so experience

calendar for in So you'll will products throughout see multiple the year in it introduced be starting our that includes XXXX, April. new

we'll guests. then many promotions balanced. And discounting. tried and promotional love to partners our our to plan of You'll then that guests And and obviously new not some to in It's see just is true key will that Applebee's. at come sprinkle some on products. excite the introduce dependent the be first engage our of the our solely we'll have But

understand I flattish the less Vance said, guys want at blocks or the Applebee's correctly. of pricing I expect more comp to Okay. just the kind you if understood because as building of commentary

to you flattish year plus drive sort guess, of your comp? the a the pricing, That's expect to transactions actually midpoint positive with guidance. X So do get of I to for

This Nick, pricing. food that's When pricing, Vance. mentioned I clarify. is commodity cost pricing, let just menu not me

you. address that Tony, just me back up and and I'll John So bring to front let

wasn't want add Yes. anything I to do have Tony, you that that to question? clarify exact you or about ask going was Thanks, pricing. I menu It probably you thing. to Vance. clarifies next think

driver the affordability. accordingly we say for franchisees, I and in speak menu they expect mean can't category I but our lead of in on our No, Yes. of we terms understand them to act visit main that to behalf is pricing, can that protect affordability

you Okay. 'XX? some And Understood. you some do the on And if just pipeline, expect final openings give actually just could? question. On Fuzzy's, us numbers in maybe

guiding which is on a The Sure. restaurants since And yet. the pipeline have grown pipeline, in not do you. we've for next Fuzzy's with XXX pipeline that of the We'll year, actuals if full sharing acquisition. Fuzzy's its we year we're

Our next from James. question comes Raymond line of the Vaccaro from Brian

back set check fourth versus reflects terms within what I wanted the to quarter? or quantify you pricing go the in or brand quarter level to And of comps. traffic can even each

turn to Vance, I'm going you. that to

Sure.

that's fourth was quarter menu So Tony as and then to Applebee negative IHOP PMICs, earlier, Box. far up X.X% price the Both fourth IHOP Black menu as fourth [ pricing PMICs was quarter. on X.X%. Applebee's, flattish both And we -- the is slightly for for quarter, traffic -- as Applebee's mentioned and makeup. saw pricing slightly beat pricing think I negative is brands But ],

on And helpful. maybe I IHOP to Jay, ask, very your perspective. get That's specifically, wanted guess Okay. I

little the be part fits how perspective around I'm be? that you're and out daypart how guests to dining think just play like with that lunch how and that first and there, higher current you might elaborate And dining because of even what your family I it, you're consumer core dinner Just seems value-conscious higher sector the ask is think environment? bit breakfast composition running focused seeing pressures for but pricing into a the versus in the given And that on from maybe might a might little would seeing curious on holding that sustainable at family a pricing you it mainly maybe can and longer. bit different the the that

our annualized as kind the little way just keep Thanks did the last of numbers just look you at And remember, year. would listened dropped they've you in doing menu the we're considerably. are yes, even a that brand people in pricing prints Yes. that's we Brian. question, X% franchisees tend or much of aren't our than of lower last sustainable. year, increases kind to not going own Vance these in when I end took the pricing taken the you at prints past toward those that's have at you than what of earlier seen far XX% right? as perpetuity, for number. to still Clearly, we've agree higher that.But think with do I told this the that numbers, you, imply to that numbers what year menu other The already And in franchisees already in our sister

that think those roll as little will start path. to we further the off a I get down

that forward, at did. I less saw looking what they concerned the menu trends moment, So I'm about those last least of the at increases just increase move kind of at in we this as

start that think will So I itself. to stabilize

know be I the much I and appreciate Applebee's pricing pricing how a systems expectation check for what's to that. be but in in franchisees, up And might XXXX? or average Okay. might reasonable IHOP are just your decisions ballpark in

So Jay, to you we'll want continue to go and Tony? then

fine. that's Yes,

is think menu fall scheduled then up that look in coming there'll be another I at spring the way moment. the here as it the got we we've one the is forward, in and

out So be their those are not going what on prices all made determinations menus haven't are to those they final yet. and

revenue you behaviors on as things what they're of past did one any I this as can't kind I that we see too. should on they of what that's done helps the really they're optimal the biggest but sure a we've So far with good RMS, time, on as are IHOP of probably own to management They're of in their to and of industry decision-maker companies to getting and this. EBITDA do. very company where optimizing actually Where decisions make how just what price, to their make them and lot give forward-looking they good careful? final protect some their to price-sensitive, getting helping they're clearly, solutions getting the traffic are the do isn't? side the going what's the good get the I same And some also scientific at how this engage some guidance they they're giving our the guidance prices business, some that advice think. now be now.And they fall.And franchisees, is you And

forward So we to look into as go year this we too. that

same Yes. along just Look, add I'll the lines.

give number when you very our a your pricing from, in make. that QX. I in model. Our And priced their are they've franchisees decisions can't they And X% consistently took have was pricing QX, it to point, been franchisees X.X% a as about strategic below to measured and guide -- peers. in down reference we've I believe, comes in which recently But

data, potential have So if below the up decisions as been look the probably you or consistent at the peers in the a they've in are at the category. in increased to pricing but serve pretty what staying guide. away would ] franchisees, taken Again, home that from [ crude

could. I That's All me, very helpful. And for just one right. if last then

I appreciate where level maybe sense us Moving out of the Could to line, on XXXX. the and brand the to to franchisee or food compared take you you dollars round Give margins? color compared margins. 'XX that on kind the bottom labor the each EBITDA, on margins to gave is either the that store Vance, a that?

Yes.

towards So those I have cost cost won't stabilizing. seen And tailwinds. the costs as labor probably franchisees as specifics with systems easing. but are us, talked of what about both shape, level. a I've being the -- elevated, the headwinds sales based not the is headwinds We from percent pre-COVID then in right? the But on are but financials. and get The good is is into labor what remain back our cost trending Food commodity shared

$XX about million talked a initiatives We that's initiatives, the that's thing. the with a good annualized restaurant as So savings.So well. profitability tailwind of

sort is of is systems But So for right? QX course, a franchisees. always we this have at lag, of is -- -- performing. right this all So in now of And context uncertain are whole, as of a the this macroeconomic I'm quarter looking environment. the the financials

John to That back our Dine now for portion. you. remarks. like Peyton, now turn closing concludes I Brands' Thank CEO, to Q&A conference would the

Thanks, of took good you the joining We you're us. favorite us with morning. care love call Gerald, this for operator. on Thanks, when our guys, us,

excited are for We XXXX.

plans. confident We're around EBITDA build our We are our to our excited guidance in share year-over-year.

the new new about and plan exciting with have compelling excited Group about our and restaurants are We about that the excited we for XX promotions. we're know you brand let that just Flynn

talk we'll quarter. next and everyone you thanks, So to

today's now you you. call. conference This concludes participating. Thank Thank for

disconnect. now may You