DIN (Post-Call) Applebee’s Comeback Impressive But G&A Costs Rising

Earlier today, Dine Brands — parent company of the Applebee’s and IHOP restaurant concepts — reported adjusted Q3 EPS of $0.80, coming in well ahead of our $0.22 forecast and sell-side consensus (according to Consensus Metrix) of $0.37. A lowerthan-expected Q3 tax rate helped EPS by roughly +20 cents; we look for the tax rate to be at (or near) 26% in 2021E, but for Q4E we now project a tax rate of 41%. (Management does not quantify what to expect for the Q4 2020 tax rate, but does say to “expect it to be significantly higher than the normal statutory rate… a very high effective tax rate. It is possible that even our updated 41.0% forecast might be too low.)

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