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Dunkin’ Brands Sales Beat As U.S. Consumers Spend More

Posted by Reuters  |  February 05,2015  |  07:27 AM
Dunkin' Donuts

REUTERS/Jim Young

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7:27 AM

02/05/15

(Reuters) – Dunkin’ Brands Group Inc reported better-than-expected quarterly sales, helped by demand for sandwiches and its newly launched dark roast coffee at Dunkin’ Donuts outlets in the United States.

The company, which also owns the Baskin-Robbins icecream brand, said it would buy back shares worth up to $700 million.

Sales at established Dunkin’ Donuts outlets in the United States, which account for three-quarters of the company’s total revenue, rose 1.4 percent in the fourth quarter ended Dec. 27.

Dunkin’ Brands, which operates almost entirely through franchises, said comparable sales rose 9.3 percent at its Baskin-Robbins outlets in the United States.

Analysts on average had expected U.S. comparable sales to rise 1 percent at Dunkin’ Donuts and 6.6 percent at Baskin-Robbins, according to Consensus Metrix.

Gasoline prices have plunged 43 percent since June, according to U.S. government data, leaving Americans with more money for discretionary spending.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose at a 4.3 percent pace in the fourth quarter, the fastest since the first quarter of 2006 and an acceleration from the third quarter’s 3.2 percent pace.

Dunkin’ Brands said average ticket size and consumer traffic increased at its U.S. Dunkin’ Donuts outlets.

Dunkin’ Donuts said on Tuesday that it would introduce new beverages at its U.S. outlets, including fruit smoothies and a frozen Dunkaccino.

Dunkin’ Brands, however, cut its 2015 adjusted earnings forecast to $1.83-$1.87 per share from $1.88-$1.91.

The net income attributable to the company rose to $52.5 million, or 50 cents per share, in the fourth quarter from $42.1 million, or 39 cents per share, a year earlier.

Excluding items, Dunkin’ Brands earned 46 cents per share.

Revenue rose 5.5 percent to $193.2 million.

Analysts on average had expected a profit of 47 cents per share and revenue of $191.4 million, according to Thomson Reuters I/B/E/S.

Dunkin’ Brands raised its first-quarter dividend by 15 percent from the fourth quarter to 26.5 cents per share.

The company’s shares were little changed at $46.70 in light premarket trading on Thursday.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Kirti Pandey)

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