Dine Brands plans to ‘expand’ its takeout business

Restaurant chain operator Dine Brands Global Inc. has gone from strength to strength in the two years since the pandemic began, with chief executive John Peyton outlining three strategies that have contributed to change.
First, the Glendale company innovated in the dining experience for customers at its Applebee’s Neighborhood Grill & Bar and International House of Pancakes (IHOP) restaurants.

“For example, our health and safety protocols are reinforced and will become the new normal. Customers can now put their name on our waiting list and pay their bills with their phone,” Peyton said on a conference call with analysts to discuss fourth quarter results.

Second, the company innovated the offsite experience.
At Applebee’s and IHOP, takeout and delivery more than doubled from 2019, Peyton said.
“A lot of it is incremental business that we intend to grow and grow,” he added. “To-go packaging is also new generation; it keeps food warm longer and it’s designed to enhance our menu with supercharged technology investment and adoption.

Finally, operations have been streamlined and new sources of revenue identified.
“Today, for example, our menus are simplified by more than a third compared to pre-Covid,” Peyton said. “And as a result, our kitchens are more efficient, there’s less food waste, faster prep times (and) improved quality and consistency of the items that are left over.”

Franchisees have embraced outdoor dining during the pandemic and increased their seating capacity, Peyton added.
Applebee has launched its cosmic wings and IHOP is testing two virtual brands – a grilled cheese concept called Thrilled Cheese and a quesadilla concept called Super Mega Dilla – in seven test markets in three states (Kentucky, Texas and Arizona) with even more markets online, Peyton continued.

“And we are working with our franchisees to expand our sales channels through ghost kitchens in the United States and abroad,” he said. “Most importantly, our asset-light model allows us to invest in what we do best – menu innovation, marketing and technology – all for the benefit of our franchisees.”

Dine Brands operates 3,600 locations domestically and nearly 200 locations internationally. It derives its revenue primarily from franchise and rental fees.

Fourth quarter increase

On March 2, Dine Brands reported adjusted net income of $22.5 million ($1.32 per share) for the quarter ending December 31, compared to adjusted net income of $6.4 million. (39 cents) to the same period a year earlier. Revenue increased 17% to $230 million.

Analysts who follow Dine Brands were pleased with the direction of the company. Jake Bartlett, an analyst at Truist Securities Inc., said in a research report on March 9 that Dine Brands has a strong long-term plan that he considers “credible” and could drive the stock significantly higher, “driven by accelerating development”. , multiple drivers (comparable store sales) and strong cash return,” he wrote.

Brian Vaccaro, analyst at Raymond James & Associates Inc., said in his research report that it was a good sign that the company and its franchisees were investing in technology and equipment to improve the offsite customer experience, increase operational efficiency and improve marketing. .

“These investments will result in increased (general and administrative) and (capital) expenditures in 2022, followed by more moderate growth in 2023 and beyond,” Vaccaro said in the report.

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