With efforts to bring convenience to its guests through mobile technology, Dunkin’ Brands reported first-quarter results that beat analysts’ top-line and bottom-line earnings estimates. The quick-service restaurant (QSR) chain, which counts brands such as Dunkin’ and Baskin’ Robbins in its roster, reported revenues of $319 million and earnings per share of 63 cents compared to $312.5 million and 62 cents.
Dunkin’ Brands CEO Dave Hoffmann said in the company’s earnings conference call on Thursday (May 2) that the company secured the perpetual license last year to the code that runs the Dunkin’ mobile app. As a result, the company can be faster to market and more flexible with its digital initiatives. “It’s the backbone to our digital ecosystem,” Hoffmann said, adding that it powers initiatives like mobile ordering.
At the same time, Hoffmann reported that on-the-go ordering saw an average weekly sales increase of 25 percent year over year (YOY), comprising 4 percent of total transactions in the quarter. He also said it represented over 7 percent of transactions in locations without a drive-thru. Mobile orders exceeded 25 percent of transactions at high-volume sites in many urban areas. “On-the-go mobile ordering is a winning proposition for Dunkin’,” Hoffman said, adding that it lets customers get in, get out and be on their way.
Hoffmann also pointed out that the company rolled out a pilot test of multi-tender at more than 1,000 Dunkin’ locations to allow diners to earn DD Perks regardless of how they make their payments. In the past, members of the DD Perks program could receive points from the coffee quick-service chain by paying with a gift card. Now, at pilot locations, customers can earn points whether they use debit, credit, Dunkin’ gift cards or cash. To accumulate points, customers scan their DD Perks loyalty ID quick-response (QR) code prior to making a payment.
“We believe multi-tender is a true unlock” to grow the company’s loyalty efforts beyond today’s 12 percent of sales, Hoffmann said. He added that the company’s test with Grubhub is performing to expectations, and has been expanded to additional restaurants across a few U.S. markets. He also noted that the company plans to quickly scale it to a larger market test.
In addition, Hoffmann reported the company saw 5.5 percent systemwide sales growth in the first quarter and 2.4 percent same-store sales growth. He said the performance was enabled by the company’s rebranding and menu simplification, as well as better execution, training and app improvements. The CEO said the results are paying off from last year’s $100 million investment in the Dunkin’ U.S. business. And internationally, the company is focusing on strategic markets such as the Middle East and parts of Asia.
Hoffmann also said there has been “terrific consumer reception” to its handcrafted espresso beverages, along with sustained momentum of its national value platform. The executive added that menu innovation and consistent national value offers are the pillars of the company’s 2019 plans.