The parent company of Dunkin' Donuts and Baskin-Robbins raised its earnings
forecast for the year after its third-quarter results came in above analyst
estimates, primarily due to sales growth at its U.S. coffee and doughnut
"The third quarter marked our fifth quarter as a public company, and our fifth consecutive quarter with double-digit adjusted earnings per share growth," Dunkin Brands Group Inc. CEO Nigel Davis said in a statement. "With the exceptional growth of the Dunkin' Donuts brand over the past two years and our intense focus on franchisee profitability, our franchisees are seeing very strong unit economics and in turn are driving our robust restaurant expansion across the U.S."
Dunkin' Brands' comparable store sales -- a key retail metric that measures sales at stores open at least a year and excludes recently closed locations -- grew across the company's four U.S. and international divisions.
They increased 2.8 percent at U.S. Dunkin' Donuts -- which account for almost 75 percent of the company's revenue and more than 80 percent of its profit -- as customers' average ticket and customer traffic increased. That's down from the 6 percent jump reported in the same quarter last year.
Dunkin' Brands' revenue rose 5 percent to $171.7 million for the third quarter ended Sept. 29, falling short of Wall Street estimates. Net income jumped 298.4 percent to $29.5 million due to an increase in operating income and a drop in debt refinancing charges.
Dunkin' Brands now forecasts $1.25 to $1.27 earnings per share for the full year, up from its previous estimate of $1.22 to $1.25.
But the company lowered its revenue growth for the year to a range of 6 percent to 7 percent -- revenue of approximately $665.9 million and $672.2 million -- down from 7 percent to 8 percent. It attributed the lowered forecast to shipping terms related to its ice cream manufacturing shift to Dean Foods announced in July and the expectation that comparable store sales at U.S. Dunkin' shops will be at the low end of its targeted range as consumers cut back on non-essential purchases due to the economy.
Dunkin' Brands franchisees and licensees opened 187 net new stores around the world in the third quarter.
The company, which reported about $8.3 billion in franchisee sales last year, operates more than 10,000 Dunkin' Donuts and almost 7,000 Baskin-Robbins stores.
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