Sales Growth Slows at Dunkin' Brands
October 01 2015 - 11:20AM
Dow Jones News
Dunkin' Brands Group Inc. said growth slowed in a key sales
number in the third quarter and store traffic declined, sending
shares down more than 10% Thursday.
The company, meeting with investors and analysts Thursday in New
York, reiterated its sales and earnings outlook for 2015, and
announced plans to close 100 Dunkin' Donut shops over the next 15
months.
The parent company of Dunkin' Donuts and Baskin-Robbins has
posted lackluster sales growth in recent quarters amid a
competitive breakfast environment and challenging economy.
For the third quarter, Dunkin' Brands said it expects to report
same-store sales growth of 1.1% at its Dunkin' Donuts stores, which
is below the 2.9% reported in the second quarter and the 2% growth
seen in the year-earlier period. Analysts were expecting same-store
sales growth of 2.7%, according to Robert W. Baird & Co.
The company didn't detail the reasons for the sales miss in
slides filed with the Securities and Exchange Commission, but it
did note a 0.7% decline in traffic at its Dunkin' Donuts
stores.
Dunkin' Brands also didn't say in the slides where the store
closings would occur but said the sites represent 0.1% of Dunkin'
Donuts U.S. sales.
Shares of the company, which have fallen 20% over the past three
months, dropped more than 10% to $43.95 in morning trading.
Dunkin' Brands affirmed its annual guidance for adjusted
per-share earnings of $1.87 to $1.91 and revenue growth of 6% to
8%. The company had raised its sales and earnings outlook in April,
saying it reflected the impact of its deal with J.M. Smucker Co.
and Keurig to sell its Dunkin' K-Cups at retail outlets
nationwide.
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 Ezequiel Minaya at ezequiel.minaya@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 01, 2015 11:05 ET (15:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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