Dunkin' Brands Group Inc. reported better-than-expected results
for its latest quarter, as higher traffic along with licensing fees
from Dunkin' K-Cups helped drive sales growth.
The parent company of Dunkin' Donuts and Baskin-Robbins has
posted lackluster sales growth in recent quarters amid a
competitive breakfast environment and macroeconomic headwinds.
Dunkin' has been trying to speed service at its doughnut shops,
redesigning prep stations to accommodate busy morning schedules
while retooling its approach to emphasize healthier fare and
breakfast sandwiches.
In addition, the company has had a faster-than-expected launch
of Dunkin' K-Cup pods into retailers nationwide, a factor Chief
Executive Nigel Travis said helped boost second-quarter results.
Still, Dunkin' again said that packaged coffee and in-store K-Cups
were a "significant" drag on the quarter's sales, while iced
coffee, espresso-based beverages and breakfast sandwiches helped
drive growth.
During the period, the company said sales at U.S. stores open at
least a year grew 2.9%, accelerating from the 1.8% pace a year
earlier.
In all for the period, Dunkin' reported earnings of $42.3
million, down form $46.2 million a year earlier. On a per-share
basis, earnings rose a penny to 44 cents, boosted by a lower share
count. Excluding items including a tax adjustment, per-share profit
increased to 50 cents from 47 cents.
Revenue grew 11% to $211.4 million.
Analysts estimated 48 cents in earnings per share and $203.7
million in sales.
U.S. same-store sales rose 3.4% at Baskin-Robbins, slower than
last year's 4.2% rate.
The company, which has said it plans to open upward of 1,400
stores in China and International, said same-store sales edged 0.1%
lower at Dunkin' Donuts shops, an improvement from a year earlier.
At international Baskin-Robbins locations, comparable-store sales
fell 2.5%, worse than the 1.6% decline in the year-ago period.
Dunkin' backed its full-year guidance of $1.87 to $1.91 in
per-share profit and 6% to 8% revenue growth, which translates to
roughly $801.2 million in sales. The company still expects to
report same-store sales growth of 1% to 3% this year and open 615
to 750 restaurants globally.
Shares, up 30% this year, were inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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