Dine Brands Global 2025 Q2 Earnings Misses Targets as Net Income Falls 40.4%

Dine Brands Global reported mixed results for Q2 2025, with revenue up 11.9% year-over-year but net income and EPS declining sharply. The company revised its same-store sales guidance for Applebee’s and IHOP amid ongoing supply chain and labor challenges.

Revenue
Dine Brands Global’s total revenue rose 11.9% to $230.78 million in Q2 2025, driven by strong growth in company restaurant sales and advertising revenues. Franchise-related income, including royalties, fees, and other contributions, totaled $174.72 million, while advertising revenue reached $73.51 million. Company-owned restaurant sales surged to $28.24 million, a significant jump from $299,000 in the prior-year period. Rental income stood at $27.52 million, and financing revenue added a modest $297,000 to the total.

Earnings/Net Income
Net income for Q2 2025 fell 40.4% to $13.81 million, or $0.89 per diluted share, compared to $23.18 million, or $1.50 per diluted share, in Q2 2024. The decline in profitability was attributed to lower segment profits and increased general and administrative expenses. Adjusted net income, excluding certain non-recurring items, dropped to $17.4 million, or $1.17 per share, from $25.6 million, or $1.71 per share, a year earlier. Despite the downturn, the company has maintained profitability for over two decades in this quarter.

Price Action
The stock experienced a sharp pullback following the earnings report, with shares falling 1.97% on the day of the announcement. Over the past week, DIN shares have fallen 10.36%, and the stock is down nearly 19.7% month-to-date.

Post Earnings Price Action Review
The “Buy on Earnings Beats and Hold” strategy has historically shown positive returns for DIN investors, outperforming a simple buy-and-hold approach by generating a higher frequency of profitable trades and larger average gains. However, the recent earnings miss and declining performance metrics suggest caution. Investors should consider broader market conditions, the company’s exposure to labor and supply chain costs, and its strategic initiatives before applying such a strategy.

CEO Commentary
CEO Jeff Cinnamon highlighted steady progress in key performance metrics, noting revenue growth and improved profitability as a reflection of the company’s strong brand portfolio and strategic initiatives. He emphasized investments in digital transformation and franchisee support as core growth drivers, while acknowledging ongoing challenges in the labor and supply chain environments. Cinnamon reiterated the company’s commitment to market expansion and innovation within the fast-casual segment, maintaining a cautiously optimistic outlook.

Guidance
For the remainder of 2025, Dine Brands expects to continue its operational and financial momentum. The company updated its guidance for Applebee’s to reflect mid-single-digit same-store sales growth and reaffirmed its focus on maintaining EPS in line with expectations. Capital expenditures are now projected to range between $30 million and $40 million, up from previous guidance, while G&A expenses are expected to fall between $205 million and $210 million. No specific GAAP net income targets were provided due to unpredictable items such as closure and impairment charges.

Additional News
Dine Brands completed a refinancing transaction in June 2025, issuing $600 million in 6.720% fixed-rate senior secured notes and terminating its previous $325 million variable funding facility. This move is expected to strengthen its capital structure and enhance financial flexibility. The company also repurchased $6.0 million in common stock during Q2 and paid $8.0 million in quarterly dividends, reflecting continued commitment to capital returns. Additionally, Dine Brands acquired 47 Applebee’s, 10 IHOP, and 12 additional Applebee’s units during the quarter, which are now reported as company-owned. These acquisitions are expected to bolster its system-wide sales and provide long-term value for shareholders.