Weak Sales Depress Dunkin’ Earnings

Dunkin’ Donuts’ stock was down more than 3 percent after earnings were announced, despite better-than-expected Q4 results, according to news on Tuesday (Feb. 6) from CNBC.

Net income lifted to $195.5 million ($2.13 per share), an increase from the $56.1 million, or $0.61 per share, the firm reported at this time last year.

Minus a tax benefit and a few other adjustments, the company earned $0.64 per share, a cent better than analysts were anticipating.

Revenue was also up to $227.1 million — a 5.3 percent increase and more than the $220.6 million Wall Street predicted.

But same-store sales did not quite live up to analysts’ expectations: up 0.8 percent as opposed to the 0.9 percent analysts anticipated. Dunkin’ Donuts said its sales growth was fueled by its breakfast sandwich offerings, iced coffees and (of course) doughnut (donut) sales.

In 2017 as a whole, same-store sales were up 0.6 percent at U.S. Dunkin’ Donuts locations and held flat at U.S. Baskin-Robbins brick-and-mortar stores.

As the quick service restaurant moves to become more competitive, the company has grown its digital ordering capacity, slimmed down its menus (in order to focus on being a more “beverage-led” brand) and put the brakes on its physical expansion plans — despite the launch of its 2,200-square-foot concept stores, which focus on mobile order ahead. The first of these, in Quincy, Massachusetts, is simply called Dunkins’ and features separate drive-through lanes and queuing areas in-store for mobile customers.

“Morning comparable store sales increased each quarter sequentially, and we had our highest quarterly beverage comparable sales of the year in the fourth quarter of 2017, driven by iced coffee and Frozen Dunkin’ Coffee,” CEO Nigel Travis said in a statement.

The company declined to provide 2018 estimates during the earnings conference call on Tuesday, instead choosing to keep that information under wraps until its Investor Day on Thursday (Feb. 8).


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