Dine Brands Global, Inc.

Good day and thank you for standing by. Welcome to the Dine Brands second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised That today's conference is being recorded. I would now like to hand the conference over to your host today, Matt Lee, Senior Vice President, Finance and Investor Relations.

Good morning and welcome to Dine Brands Global's second quarter fiscal 2026 conference call. This morning's call will include prepared remarks from John Peyton, CEO and President of Applebee's, and Vance Chang, CFO. Following those prepared remarks, Lawrence Kim, Chief Commercial Officer and President of IHOP will also be available along with John and Vance to address questions during the Q&A portion of the call. Please remember our safe harbor regarding forward-looking information. During the call, management will discuss information that is forward-looking and involves known and unknown risk, uncertainties, and other factors, which may cause the actual results to be different than those expressed or implied. Please evaluate the forward-looking information in the context of these factors, which are detailed in today's press release and 10-Q filing. The forward-looking statements are as of today, and we assume no obligation to update or supplement these statements. We will refer to certain non-GAAP financial measures, which are described in our press release and available on Dine Brands Investor Relations website. With that, it is my pleasure to turn the call over to Dine Brands CEO, John Peyton.

Good morning, everyone, and thanks for joining us. Today, I'd like to start with our results, and then I'll share some perspective on what's driving those results at each of our brands before turning it over to Vance for a deeper look at the financials. Our second quarter financial performance reflected the continued resilience of our brands in a dynamic operating environment. IHOP posted positive 1.5% comp sales and delivered its third consecutive quarter of industry outperformance versus Black Box on both traffic and sales. Applebee's reported comp sales of negative 1.8%, shaped by a difficult April comparison period, although we did see improvement in May and June. Fuzzy's delivered positive comp sales for the second consecutive quarter, and our adjusted EBITDA was $54 million compared to $56 million in the same quarter last year. With those results as context, let me share some insights on what's driving them. The economic conditions we described at the end of Q1 continued into Q2. Inflation in food away from home, elevated gas prices, and declining consumer sentiment contributed to more deliberate spending behavior. Guests aren't walking away from dining out, but they are making intentional choices of when and where they choose to go. And our results show that when they choose Applebee's or IHOP, they are engaging fully. Average check was slightly up at both brands, and value mix remained consistent with Q1 levels, 26% at Applebee's and 22% at IHOP. We believe this is a result of the commitment we made roughly a year ago to deliver core, consistent value through our everyday value platforms, two for $25 at Applebee's and everyday value at IHOP. We're seeing that consistency show up in our Q2 results, and we're encouraged by the early trends in the third quarter. Underpinning all of this is a shared framework across the brands, building long-term equity and everyday value, balancing check with premium options, and and Driving Buzz Through Innovation. These aren't separate playbooks. They're the same priorities executed through the distinct platforms and personalities of each brand. While we expect the macro environment to remain dynamic throughout the rest of the year, we enter the second half in a stronger position than we were a year ago. Our operations are sharper, our value messaging is more consistent, and our brands are showing up as part of culture, not just reacting to it. Combined with our long-term growth initiatives, dual brands, a refreshed physical footprint, and our company-owned portfolio, and supported by our asset-light model, we have a strong foundation to build on the momentum we're seeing across the brands and deliver growth for our franchisees and our shareholders. And so with that, I'll share some updates across the portfolio, beginning with Applebee's. Applebee's comp sales performance this quarter reflects the nature of building momentum, a slower start to gain traction as the period progressed. This April, we were comping against one of the strongest 2 for 25 promotions, the Sizzlin' Skillets campaign, in the same period last year. As the quarter progressed, results improved sequentially, driven by All You Can Eat and Pulio with Don Julio campaigns. This is our barbell strategy and our marketing playbook in action, an accessible, value-driven, all-you-can-eat campaign anchored in affordability paired with a culturally resonant, higher-priced indulgence that drove traffic and generated social buzz among the younger audience. Together, these campaigns lifted both food and beverage sales, with liquor comps up 10.5% during the promotional period. Thank you for joining us today. Looking ahead to Q3, we're seeing a solid performance for both the Dollarita and the bacon cheeseburger wonton taco on the $2 for $25 platform, a combination that plays into the strength of our value platform and bar and beverage program. Off-premise sustained its positive momentum with comp sales of 1.5% and a fifth consecutive quarter of double-digit delivery comp sales growth, a meaningful signal of the underlying demand for the brand across different platforms. On the development front, the Lookin' Good remodel program continues to gain momentum. 66 remodels have been completed year-to-date, with over 100 planned for 2026, putting us on pace for approximately one-third of the system to be remodeled by year-end. These remodels continue to deliver a mid-single-digit sales lift on average. Alongside the physical transformation, we've remained equally focused on the in-restaurant experience. Manager-guest interactions rose to 75% of dine-in guests in Q2, up from 2025 baseline of 68%. And that's showing up in our guest satisfaction scores, which continued to climb quarter over quarter. Our average Google rating increased to 4.4 out of 5 in Q2, that's up from 4.1 a year ago, and across a review base that grew more than 23% year over year. Higher ratings on a larger base of reviews is a strong indication that our operational and physical improvements are registering with guests. Overall, we're encouraged by the brand's improved performance as the quarter progressed, the continued strength of our off-premise platform and the traction of our operational agenda heading into the second half of the year. And now, IHOP. For the third consecutive quarter, IHOP outperformed BlackBox industry benchmarks for sales and traffic, specifically beating traffic by mid-single digits. Comp sales grew 1.5%, driven by a new value-focused advertising campaign that brought guests in and deliberate check-driving initiatives that kept average ticket moving in the right direction. Q2 was a clear expression of IHOP's barbell strategy. Everyday value driving frequency on one end, In April, we expanded our $6 value menu with the BLTAF, bacon, lettuce, tomato, and fries, responding to our guest demands for complete meals across day parts. Beyond value, our menu continues to balance approachable everyday options with premium offerings, including the promotion of IHOP's signature stuffed and stacked omelets and culturally relevant LTOs. Most recently, we responded to overwhelming fan enthusiasm by bringing back Dubai Chocolate Pancakes as a national LTO, following a widely popular limited release the year prior. In just the first few weeks, it's already over-indexing in sales versus forecast, and we'll have more to share in Q3. IHOP also saw consistent growth in off-premise, delivering its fifth consecutive quarter of positive off-premise comp sales, with a 3.5% lift in Q2. Thank you for joining us. and many more. IHOP has now outperformed black box benchmarks on both sales and traffic for three consecutive quarters. An early Q3 trend suggests that momentum is continuing. The strategy is working, and the operational foundation behind it is stronger than it was a year ago. And Fuzzy's delivered positive comp sales for the second consecutive quarter, outperforming its black box competitive set. The results reflected our sustained effort to strengthen that business by improving technology, streamlining the menu, and enhancing the in-restaurant experience. Off-premise remains a meaningful and consistent contributor to the brand's quarter-over-quarter improvement. We're encouraged by Fuzzy's performance in the first half of the year and remain focused on sustaining and building on its momentum going forward. Now I'll turn to our dual-brand initiative. The platform continued its steady expansion in Q2. As a reminder, our target is to open 80 dual brands by year end, and as of today, we have 45 domestic dual brand locations open, including 7 company-owned, with 12 additional locations under construction. With each new opening, we refine our pre-opening process, reduce construction timelines, and sharpen our operational playbook, resulting in a faster path to steady-state performance. is also continuing to reach new markets. In June, we opened our first dual brand in Los Angeles, one of the most competitive restaurant markets in the country. Opened by an existing franchisee who knows our brands well, the location is already performing at high sales levels, a strong proof point that the concept can win in new markets and that experienced operators are continuing to lean in. We're pleased that franchisee interest in the dual brand program remains strong and our pipeline continues to grow. We see increased engagement from franchisees who are incorporating dual brand conversions into their long-term development plans as a growth vehicle, given the compelling economics versus the prior standalone unit. And taken together, dual brands and investing in the physical restaurant experience matter, and the early results validate that conviction. Before I turn it over to Vance, I'll reiterate that we're seeing steady performance across our brands, which gives us continued confidence that our near-term priorities are setting us up for long-term growth and value creation. Vance.