Dunkin' Brands 2Q profit more than doubles
CANTON, Mass. (AP) - The operator of Dunkin' Donuts and Baskin-Robbins said Thursday that its net income more than doubled in the second quarter as it benefited from a gain on the sale of a stake in its Australian operation.
The Canton, Mass. company said that beverage sales were strong in part because of new iced coffee flavors inspired by Baskin-Robbins ice cream. Dunkin' Brands also reported better doughnut sales, which were helped by the National Donut Day program. Breakfast and afternoon items also did well, with the company rolling out new products such as chicken and tuna salad wraps and new chicken sandwiches.
Its adjusted earnings beat Wall Street expectations, and its shares rose almost 3 percent in premarket trading.
Dunkin' Brands Group Inc., which debuted the Royal Munchkin and Baby Shower Cake this week in honor of the birth of Britain's Prince George Alexander Louis, earned $40.8 million, or 38 cents per share, for the period ended June 29. That's up sharply from $18.5 million, or 15 cents per share, a year ago.
The current quarter included a gain on the sale of 80 percent interest in its Baskin-Robbins Australia business. They year-ago results were weighed down by a $20.7 million litigation reserve in the prior-year period.
Stripping out unusual items, earnings were 41 cents per share in the latest quarter.
Analysts, on average, forecast earnings of 40 cents per share, according to a FactSet poll.
Revenue increased 6 percent to $182.5 million from $172.4 million partly on increased sales of ice cream products. But Wall Street was looking for higher revenue of $183.9 million.
Ice cream product sales climbed to $32.8 million from $28.4 million. Dunkin' Brands also made more from franchise fees and royalty income, and sales at company-owned restaurants improved.
Sales at Dunkin' Donuts shops in the U.S. open 54 weeks or more rose 4 percent on increased traffic and people spending more per transaction. This was flat with the prior-year period.
Sales at Baskin-Robbins locations in the U.S. open 54 weeks or more rose 1.6 percent, which was slower than the 4.6 percent rise in the prior-year period. The sales benefited from the Flavors of the Month program, better cake sales around Mother's Day, Father's Day and school graduations and limited offers on take-home ice cream quarts.
Overseas, Dunkin' Donuts shops open 54 weeks or more fell 1.7 percent. This compares with a 3.5 percent increase a year earlier. For Baskin-Robbins, the figure climbed 2.6 percent, better than the 1.5 percent growth a year ago.
This metric is a key gauge of a restaurant operator's health because it excludes results from locations recently opened or closed.
Dunkin' Brands also declared a third-quarter dividend of 19 cents per share. The dividend will be paid on Sept. 4 to shareholders of record on Aug. 26.
Its shares rose $1.25, or 3 percent, to $43.25 in premarket trading two hours ahead of the market opening.
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