DNKN Dunkin Brands Group Inc

Dunkin' Brands Group Inc. posted better-than-expected results in its fourth quarter, despite declines in same-store sales and traffic at its Dunkin' Donuts U.S. locations.

For the latest quarter, same-store sales fell 0.8% at Dunkin' Donuts U.S. locations, below the 1.5% growth seen in the year-prior period. Price increases were offset by less traffic at those stores, and in-restaurant sales of K-cup pods and packaged coffee continued to have a negative impact, the company said.

Dunkin' Brands Chief Executive Nigel Travis said Dunkin' Donuts U.S. same-store sales performance was disappointing.

For the year, the company said it expects revenue growth of between 4% and 6% and adjusted earnings per share $2.17 to $2.19. Analysts polled by Thomson Reuters had expected 5% revenue growth and earnings per share of $2.18. The company said it expects to add between 430 and 460 Dunkin' Donuts restaurants in the U.S.

The parent company of Dunkin' Donuts and Baskin-Robbins has posted modest revenue growth in recent quarters amid a competitive breakfast environment and challenging economy. In January Dunkin' reached an agreement to begin developing hundreds of Dunkin' Donuts and Baskin-Robbins restaurants in South Africa.

Same-store sales at Baskin-Robbins locations in the U.S. climbed 4.4%, compared with 9.4% during the same period a year ago. The growth was driven by increased sales of cups and cones, beverages, desserts, sundaes and cakes, stimulated by strong demand online.

The company said it expects Baskin-Robbins U.S. comparable-store sales to grow between 1% and 3% for the year and for Dunkin' Donuts U.S. comparable-store sales to increase between 0% and 2%.

Dunkin' said that it wrote down the value of its Japan joint venture by $54.3 million.

During the quarter the company opened 172 net new restaurants world-wide, including the previously announced closing of 41 self-serve coffee stations within Speedway stores.

The company posted a loss of $8.9 million, or 10 cents a share, down from a profit of $52.5 million, or 50 cents a share, a year prior.

Excluding the Japan impairment and other charges, adjusted earnings on a per-share basis were 52 cents.

Revenue climbed 5.5% to $203.8 million due to system wide growth and increased royalty revenue from branded k-cup pods.

Analysts surveyed by Thomson Reuters forecast per-share earnings at 50 cents a share on revenue of $203 million.

Dunkin' has been trying to speed service at its doughnut shops, redesigning prep stations to be faster to meet busy morning schedules. Dunkin', which gets most of its sales from breakfast, is also retooling its approach to emphasizing healthier fare and focus more on breakfast sandwiches.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

February 04, 2016 07:45 ET (12:45 GMT)

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