DineEquity (NYSE: DIN) reported Q4 EPS of $1.37, in-line with the analyst estimate of $1.37. Revenue for the quarter came in at $154.17 million versus the consensus estimate of $156.83 million.

• IHOP's domestic system-wide comparable same restaurant sales declined 2.1% for the fourth quarter of 2016.
• Applebee's domestic system-wide comparable same-restaurant sales declined 7.2% for the fourth quarter of 2016.

Fourth Quarter of Fiscal 2016 Financial Highlights

• GAAP net income available to common stockholders was $21.1 million for the fourth quarter of 2016, or earnings per diluted share of $1.18. This compares to net income available to common stockholders of $25.0 million, or earnings per diluted share of $1.35, for the fourth quarter of 2015. GAAP net income for the fourth quarter of 2016 declined compared to the same period of 2015 mainly due to a decrease in gross profit, partially offset by improvement in general and administrative expenses primarily due to lower incentive compensation.
• Adjusted net income available to common stockholders was $24.5 million, or adjusted earnings per diluted share of $1.37, for the fourth quarter of 2016. This compares to $29.5 million, or adjusted earnings per diluted share of $1.59, for the same period of 2015. The decrease in adjusted net income was mainly due to lower gross profit. The decrease was partially offset by improvement in general and administrative expenses primarily due to lower incentive compensation. (See \"Non-GAAP Financial Measures\" below.)
• General and administrative expenses were $37.0 million for the fourth quarter of 2016. This compares to approximately $45.0 million for the same period of 2015. The improvement was mainly due to lower incentive compensation and a decline in costs associated with the timing of franchise conferences.

Financial Performance Guidance for Fiscal 2017

The following projections for fiscal 2017 are based on management\'s expectations as of March 1, 2017.

• Applebee's domestic system-wide same-restaurant sales performance is expected to range between negative 4.0% and negative 8.0%.
• IHOP's domestic system-wide same-restaurant sales performance is expected to range between 0.0% and positive 3.0%.
• Applebee's franchisees are projected to develop between 20 and 30 new restaurants globally, the majority of which are expected to be international openings. As part of a detailed system-wide analysis to optimize the health of the franchisee system, we anticipate the closure of approximately 40 to 60 restaurants. The expected closures will be based on several criteria, including meeting our brand and image standards and operational results.
• IHOP franchisees and its area licensee are projected to develop between 75 and 90 restaurants globally, the majority of which are expected to be domestic openings. We expect the closure of approximately 18 restaurants as part of normal attrition.
• Franchise segment profit is expected to be between $323 million and $338 million.
• Rental and Financing segments are expected to generate roughly $38 million in combined profit.
• General and administrative expenses are expected to range between $170 million and $177 million, including non-cash stock-based compensation expense and depreciation of approximately $22 million. The anticipated increase in general and administrative expenses compared to fiscal 2016 is primarily due to expectations for higher personnel-related and incentive compensation costs as well as investments in Applebee\'s stabilization initiatives. These initiatives will total approximately $10 million in fiscal 2017 and we expect that a substantial amount will not recur. The range for expected general and administrative expenses is inclusive of approximately $9 million of non-recurring cash severance and equity compensation charges to be incurred in the first quarter of fiscal 2017.
• Interest expense is expected to be approximately $62 million. Approximately $3 million is projected to be non-cash interest expense.
• Weighted average diluted shares outstanding are expected to be approximately 18 million shares.
• The income tax rate is expected to be approximately 38%.
• Cash flow provided by operating activities is expected to range between $98 million and $108 million. The expected decline compared to fiscal 2016 is primarily due to projections for lower net income due to higher general and administrative expenses as well as expectations for domestic system-wide comparable same restaurant sales.
• Capital expenditures are projected to be roughly $12 million.
• Adjusted free cash flow (See \"Non-GAAP Financial Measures\" below) is projected to range between $96 million and $106 million. The expected decline in adjusted free cash flow compared to fiscal 2016 is primarily due to projections for lower net income due to higher general and administrative expenses as well as expectations for domestic system-wide comparable same restaurant sales.

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