Applebee's Q3 Not So Tasty: Fool by Numbers

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On Oct. 25, Applebee's International (Nasdaq: APPB) released third-quarter earnings for the period ending Sept. 24.

• Revenues and EPS missed analyst estimates.
  
  
• Revenues increased 5% to $321 million, helped by 28 new Applebee's restaurants, including six company-owned and 22 franchised restaurants. Total restaurants now stand at 1,884.
  
  
• Operating margin has declined to 7.71%.
  
  
• A 31% fall in cash from operations led to a 60.6% fall in free cash flow.
  
  
• Dave Goebel was appointed as the new CEO.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	Q3 2006	Q3 2005	Change
Sales	$323	$321	$305	5.02%
Net Profit	--	$15	$22	(33%)
EPS	$0.25	$0.20	$0.28	(28.6%)
Diluted Shares	--	75	77	(2.6%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	19.89%	22.19%	(2.30)
Operating Margin	7.71%	11.80%	(4.09)
Net Margin	4.63%	7.25%	(2.62)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2006	Q3 2005	Change
Cash + ST Invest.	$10	$10	(3.4%)
Accounts Rec.	$37	$39	(5.1%)
Inventory	$10	$21	(51.6%)

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable	$38	$54	(29.3%)
Long-Term Debt	$184	$126	45.7%

Learn the ways of the balance sheet.

Cash Flow Highlights

	YTD 2006	YTD 2005	Change
Cash From Ops.	$109	$159	(31%)
Capital Expenditures	$87	$101	(14.1%)
Free Cash Flow	$23	$58	(60.6%)

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Related Companies:

• McDonald's (NYSE: MCD)
• Yum! Brands (NYSE: YUM)
• Darden Restaurants (NYSE: DRI)

Related Foolishness:

• Is Darden Tantalizing?
• Sour Applebee's: Fool by Numbers
• Not the Applebee's of My Eye

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.