Categories: Earnings

Dunkin's 'Flexible Operating Model' Offers Delivery, Pickup, Drive-Thru Amid COVID-19

As it worked to provide its customers with off-premise options amid the coronavirus pandemic, Dunkin’ Brands reported that about 90 percent of Dunkin’ U.S. locations remain open as of April 25. The company reported that Dunkin’ U.S. has a “flexible operating model” where it can keep providing delivery, curbside pickup, and drive-thru where in-restaurant dining is not permitted.

CEO Dave Hoffmann said on an earnings call with analysts on Thursday (April 30) that U.S. Dunkin’ comparable-store sales were down 2 percent compared to the prior year. “The rapid onset of COVID reversed strong momentum across the system that kickstarted the year.” Hoffmann noted that Dunkin’ U.S. had 3.5 percent comparable store sales in the first 10 weeks of the quarter, and it was “on track to deliver the highest quarterly comp since Q3 of 2013.”

Hoffmann noted that U.S. comps only fell over the quarter’s last three weeks as shelter-in-place orders and social distancing practices spread throughout the nation. And, with the daily morning routines of diners interrupted, Hoffmann noted that the brand is experiencing a shift in sales through dayparts. Sales volumes in the early morning are down, Hoffmann stated, but they have picked up from 10 a.m. to 2 p.m. as “people venture out for a break.”

For Baskin-Robbins U.S., Hoffmann noted the brand had 11 percent comparable store sales and positive traffic through the quarter’s first ten weeks before ultimately reporting comparable-store sales growth of 1.8 percent. Hoffmann said the company was “pleased to see the quarter close with positive results despite the impact of sales and traffic from COVID.”

International Markets

Hoffmann also noted that the company’s international business was on pace to “deliver significant gains in Q1.” Dunkin’ International had 7.2 percent comps, and Baskin-Robbins International had 7 percent comps through the end of February but before the businesses closed out the quarter at -7.1 percent and 2.5 percent, respectively.

The executive noted that a number of the company’s international markets remain completely closed, while others are still limited by curfews or are delivery-only. He noted that approximately 50 percent of the company’s global portfolio in total is open, with closures split roughly equally between both brands.

While the world will be a different place when the coronavirus pandemic is over, Hoffmann said, “We think people need a little joy in their lives right now, and we’re proud to play a role in providing that safely.”

All in, Dunkin’ Brands reported revenues of $323.1 million and diluted adjusted earnings per share of 67 cents compared to analyst estimates of $311.8 million and 62 cents. Its shares were down approximately 3.5 percent just after 1 p.m. Eastern Time on Thursday (April 30).

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The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.