Dunkin' Brands Profit Rises as Revenue Slips

Dunkin' Brands Group Inc. reported a 14% jump in profit for its third quarter helped by coffee sales, but lowered its revenue outlook for the year because of weakness at Baskin-Robbins.

The Canton, Mass., based company said sales were partially hurt by dwindling foot traffic in stores, but that was offset by increased average spending per visit.

Dunkin' Brands updated its 2016 outlook to 2% growth in revenue, a drop from the 3% to 5% guided in the second quarter, driven by weaker-than-expected sales of ice cream products related to its Baskin-Robbins International segment.

The company, however, backed its profit expectations for the year, saying it still sees adjusted per-share earnings between $2.20 and $2.22.

Dunkin' recently joined with Salesforce.com Inc. to enhance its customer loyalty program and announced a partnership with Coca-Cola Co. to introduce a line of bottled coffee in 2017.

Over all for the period, profit rose to $52.7 million, or 57 cents a share, compared with $46.2 million, or 48 cents a share, in the year-ago quarter. On an adjusted basis, the doughnut company said per-share earnings rose to 60 cents from 52 cents.

Revenue slipped 1.3% to $207.1 million, driven by the sale of Dunkin's remaining company-operated stores, in a move to become 100% franchised. Total systemwide sales increased 6.3% to $2.82 billion. Systemwide sales include sales at franchisee- and company-operated restaurants, including joint ventures.

Analysts polled by Thomson Reuters had forecast earnings of 59 cents a share on $214.8 million in revenue.

Same-store sales at Dunkin' Donuts in the U.S. grew 2%, while domestic same-store Baskin-Robbins sales declined 0.9%.

Shares closed at $51 and were inactive premarket. The stock has risen 19% so far this year.

(END) Dow Jones Newswires

October 20, 2016 08:45 ET (12:45 GMT)

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