CFO's Departure Takes Bite Out of DineEquity
Reasons for leaving unclear.
DineEquity (DIN), best known for its Applebee's and IHOP brands, had a particularly rough trading session on Tuesday. In fact, the shares lost more than a quarter of their value.
While the larger market decline almost surely played a role, it seems evident that investors were troubled by the resignation of Dine's CFO, Thomas Conforti.
The press release -- which frankly raises more questions than it answers -- said Conforti left to "pursue other opportunities."
But why would Conforti, who's been with the company for 6 years, leave on apparently short notice? And why didn't the company indicate he would work with his successor over a transition period? (For what it's worth, Conforti did have some positive things to say in the release about his experience with Dine.)
But still, the company has no one lined up to fill his shoes, though its controller, Gregory Kalvin, is filling in until a permanent replacement is named.)
Did Conforti perhaps think that opportunities were limited at DineEquity? After all, casual dining is an extremely tough business to be in these days, and Dine's coming off a so-so second quarter. However, on the flipside, the company's fortunes could dramatically improve over the long term, especially with 2 large brands under its umbrella.
I think it's also important to note that Conforti wasn't exactly making chump change. According to its proxy statement, he earned a salary of almost $378,000 in 2007. Seems like a pretty sweet gig.
Long story short: Though I can't read Conforti's mind, I do know is that his departure leaves me with a bad taste in my mouth. My gut's telling me to steer clear of the stock until the entire picture for the company begins to clear.
DineEquity closed at $17.77, down $6.20 or 25.87%.
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