DineEquity's 4th quarter mixed, declares dividend

DinEquity's 4th quarter mixed; declares 1Q dividend and approves $100M repurchase program

Associated Press

GLENDALE, Calif. (AP) -- DineEquity, parent company of IHOP and Applebee's, saw fourth-quarter net income slump 34 percent as it dealt with higher income taxes and costs related to the refranchise and sale of Applebee's company-run restaurants.

DineEquity completed Applebee's to a 99 percent franchised operation last year, it said, and results adjusted for the one-time costs topped Wall Street expectations.

The company earned $18 million, or 97 cents per share, for the three months ended Dec. 31. That's down from $27.3 million, or $1.51 per share, in the prior-year period.

Stripping out impairment and closure charges and other items, earnings were 83 cents per share.

Analysts expected earnings of 78 cents per share, according to a FactSet poll.

Revenue fell 35 percent to $158.6 million from $242.2 million, missing Wall Street estimate of $161.5 million.

Sales at Applebee's in the U.S. that have been in operation for at least a year edged up 0.9 percent as customers spent more at the table.

At IHOP, comparable-store sales fell 2.6 percent as restaurant traffic fell and customer spending went in the opposite direction.

Same-store sales are a key gauge of a restaurant operator's performance because it excludes the volatility from recently opened or closed restaurants.

DineEquity Inc. lowered its total debt by $77.2 million in the quarter.

The company's full-year net income jumped 73 percent to $122.5 million, or $6.63 per share, from $70.7 million, or $3.89 per share, in the previous year.

Adjusted earnings were $4.28 per share.

Annual revenue fell to $849.9 million from $1.08 billion.

Applebee's company-run restaurant operating margin improved to 16.3 percent from 14.5 percent mostly because of the refranchise and sale of less profitable company-run locations.

Systemwide sales at Applebee's U.S. locations open at least a year climbed 1.2 percent primarily due to an increase in the average check. The figure dropped 1.6 percent for IHOP on weaker traffic.

The Glendale, Calif. company lowered its total debt by $332.6 million in fiscal 2012.

Going forward, DineEquity anticipates fiscal 2013 systemwide sales at Applebee's and IHOP U.S. locations open at least a year will be down 1.5 percent to up 1.5 percent.

The company also announced Wednesday that its board declared a first-quarter dividend of 75 cents per share. The dividend will be paid on March 29 to shareholders of record on March 15.

The board also approved a $100 million stock repurchase program. The buyback replaces a $45 million repurchase program that was announced in August 2011.

DineEquity has more than 3,600 restaurants combined in 17 countries and more than 400 franchisees. Its stock shed 3 cents to $72.25 in premarket trading.

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