Dine Brands stock steady despite softer 4Q results

Wednesday, Raymond (NSE:RYMD) James maintained a Market Perform rating on Dine Brands Global Inc. (NYSE:DIN) following the company’s announcement of weaker-than-expected fourth-quarter comparable sales (comps) and EBITDA results. According to InvestingPro data, the stock is currently trading at $23.47, near its 52-week low, with a notably low P/E ratio of 4x and an attractive dividend yield of 8.7%. Dine Brands, the parent company of IHOP and Applebee’s, reported a 2.8% decline in IHOP’s comps, contrasting with Raymond James’ estimate of a 1.0% decrease. Similarly, Applebee’s experienced a 4.7% drop versus the anticipated 3.5% decline. According to the analyst, both brands underperformed compared to their respective industry peers.

The company also provided its adjusted EBITDA guidance for 2025, projecting between $235 million and $245 million, which falls slightly short of the consensus estimate of $246 million. This forecast accounts for roughly flat comparable sales and a marginally negative net system-wide unit growth.

In the fourth quarter, Dine Brands acquired 56 Applebee’s restaurants at an approximate cost of $8.5 million. Simultaneously, the company re-franchised nine locations. As a result, Dine Brands now directly operates 47 units, primarily situated in the Southern United States.

Despite the softer financial outcomes and guidance, Dine Brands’ shares remained relatively unchanged in pre-market trading. The performance indicates that the market had already adjusted expectations or that the news did not significantly alter investor sentiment toward the company’s stock. InvestingPro analysis suggests the stock is currently undervalued, with 13 additional exclusive ProTips available to subscribers, covering everything from shareholder returns to financial health metrics.

Dine Brands’ current position reflects the challenges in the casual dining sector, where competition is intense and consumer preferences are constantly evolving. Maintaining performance and growth in such an environment requires strategic agility and operational efficiency. The company’s recent activities in acquiring and re-franchising restaurants demonstrate its efforts to optimize its portfolio and potentially improve its market standing in the long term. With the stock down 22% year-to-date and trading at an EV/EBITDA multiple of 8x, investors seeking detailed analysis can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

In other recent news, Dine Brands Global Inc. reported its fourth-quarter financial results, highlighting a mixed performance. The company posted revenue of $204.77 million, exceeding the consensus estimate of $201.05 million. However, the adjusted earnings per share fell short, coming in at $0.87, compared to the $1.35 forecast by analysts. Comparable same-restaurant sales experienced a decline, with Applebee’s down 4.7% and IHOP falling 2.8% in the quarter compared to the previous year. Despite these challenges, CEO John Peyton emphasized the company’s strategic plan addressing both short-term and long-term goals for 2025. Looking ahead, Dine Brands expects Applebee’s domestic same-restaurant sales to range from -2% to +1%, and IHOP’s from -1% to +2%. The company also anticipates consolidated adjusted EBITDA to be between $235 million and $245 million for the full year 2025. These developments reflect the dynamic environment in which Dine Brands operates.

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