Casual restaurant chain Dine Brands (NYSE: DIN) missed Wall Street’s revenue expectations in Q3 CY2025, but sales rose 10.8% year on year to $216.2 million. Its non-GAAP profit of $0.73 per share was 26.3% below analysts’ consensus estimates.

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Company Overview

Operating a franchise model, Dine Brands (NYSE: DIN) is a casual restaurant chain that owns the Applebee’s and IHOP banners.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years.

With $866.5 million in revenue over the past 12 months, Dine Brands is a small restaurant chain, which sometimes brings disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.

As you can see below, Dine Brands struggled to increase demand as its $866.5 million of sales for the trailing 12 months was close to its revenue six years ago (we compare to 2019 to normalize for COVID-19 impacts). This was mainly because it didn’t open many new restaurants and observed lower sales at existing, established dining locations.

This quarter, Dine Brands’s revenue grew by 10.8% year on year to $216.2 million but fell short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 4.4% over the next 12 months. While this projection implies its newer menu offerings will catalyze better top-line performance, it is still below average for the sector.

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Restaurant Performance

Number of Restaurants

A restaurant chain’s total number of dining locations influences how much it can sell and how quickly revenue can grow.

Dine Brands operated 3,374 locations in the latest quarter, and over the last two years, has kept its restaurant count flat while other restaurant businesses have opted for growth.

When a chain doesn’t open many new restaurants, it usually means there’s stable demand for its meals and it’s focused on improving operational efficiency to increase profitability.

Same-Store Sales

The change in a company's restaurant base only tells one side of the story. The other is the performance of its existing locations, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth at restaurants open for at least a year.

Dine Brands’s demand has been shrinking over the last two years as its same-store sales have averaged 1.9% annual declines. This performance isn’t ideal, and we’d be concerned if Dine Brands starts opening new restaurants to artificially boost revenue growth.

Note that Dine Brands reports its same-store sales intermittently, so some data points are missing in the chart below.

Key Takeaways from Dine Brands’s Q3 Results

We struggled to find many positives in these results. Its EBITDA missed and its EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 2.5% to $24 immediately following the results.

Dine Brands’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.