DineEquity, Inc., the parent company of Applebee’s Neighborhood Grill & Bar and IHOP restaurants, announced financial results for the second quarter of fiscal 2016.
“We posted growth in adjusted earnings per diluted share for the second quarter, despite soft comparable sales at Applebee’s and IHOP. While we are dissatisfied with the comparable sales results, we are confident in our clear long-term strategies for both brands,” says Julia A. Stewart, chairman and chief executive officer of DineEquity, Inc.
Revised expectations for Applebee's franchisees to develop between 25 and 33 new restaurants, reflecting a reduction from previous expectations of between 35 and 45 new restaurants.
Stewart concludes, “These long-term strategies will build our brands across the spectrum of food and beverage innovation, social and digital marketing, development expansion as well as platforms to meet the convenience needs of today’s consumer, such as delivery, to-go initiatives and mobile applications to name a few.”
In the first six months of fiscal 2016, cash flows from operating activities were $53.9 million compared to $48.1 million in the same period of fiscal 2015. Free cash flow was $56.4 million for the first six months of fiscal 2016, compared to $49.7 million for the first six months of fiscal 2015.
Same-Restaurant Sales Performance
Second Quarter of Fiscal 2016
- IHOP’s domestic system-wide comparable same-restaurant sales increased 0.2 percent for the second quarter of 2016.
- Applebee’s domestic system-wide comparable same-restaurant sales declined 4.2 percent for the second quarter of 2016.
First Six Months of Fiscal 2016
- IHOP’s domestic system-wide comparable same-restaurant sales increased 0.8 percent for the first six months of fiscal 2016.
- Applebee’s domestic system-wide comparable same-restaurant sales declined 3.9 percent for the first six months of fiscal 2016.
Some other notes include:
Revised expectations for Applebee’s franchisees to develop between 25 and 33 new restaurants, reflecting a reduction from previous expectations of between 35 and 45 new restaurants. IHOP franchisees and its area licensee are expected to develop between 65 and 77 new restaurants. This compares to the previous projections of between 60 and 70 new restaurants.
General and administrative expenses were $36.5 million for the second quarter of 2016. This compares to $34.6 million for the same period of 2015. The expected increase was mainly due to higher personnel costs for several senior management positions filled after the first quarter of 2015. Approximately $0.5 million of the general and administrative expenses was related to the strategic consolidation of our restaurant support center announced on September 3, 2015.
In the first six months of fiscal 2016, cash flows from operating activities were $53.9 million compared to $48.1 million in the same period of fiscal 2015. Free cash flow was $56.4 million for the first six months of fiscal 2016, compared to $49.7 million for the first six months of fiscal 2015.
General and administrative expenses were $75.9 million for the first six months of 2016. This compares to $68.8 million for the same period of 2015. The increase was primarily due to higher personnel costs. Approximately $2.6 million of the increase in general and administrative expenses was due to the strategic consolidation of the restaurant support center.
