Business

Dunkin’ Donuts corporate parent reports 3q results

By Chris Reidy

October 24, 2013

2 minutes to read

Strong beverage sales helped give a 4.2 percent sales lift to US Dunkin’ Donuts stores open at least a year, the chain’s corporate parent said Thursday in reporting third-quarter financial results.

Photo taken from company website.

Meanwhile, growth in doughnut sales was led by the introduction of Lemonade, Key Lime and Pumpkin Pie flavors, said Dunkin’ Brands Group Inc., the Canton company that operates Dunkin’ Donuts and the Baskin-Robbins ice cream chain.

Third-quarter revenues rose 8.5 percent to $186.3 million. Most restaurants are owned by franchisees, and franchisee reported sales were $2.44 billion up 5.8 percent from the same quarter a year ago.

Dunkin’ Brands said its third-quarter net income increased by $10.7 million to $40.2 million; that was up 36.2 percent from a year ago, primarily as a result of the $11.9 million increase in operating income as well as the $4 million loss on debt extinguishment and refinancing transactions incurred in the third quarter of 2012, offset by a $4.5 million increase in income tax expense and a $0.9 million increase in interest expense.

In a press release, the company highlighted several third-quarter metrics including an adjusted operating income increase of 4.6 percent. The company also noted that diluted adjusted earnings per share increased 10.8 percent to $0.41.

“Both Dunkin’ Donuts and Baskin-Robbins US continue to have excellent momentum and delivered another quarter of strong comparable store sales and net new restaurant growth,’’ Nigel Travis, chairman and chief executive of Dunkin’ Brands, said in a statement. “With 222 net new openings year-to-date, we now have 7,500 Dunkin’ Donuts restaurants in the US and the demand by existing and prospective franchisees to grow with us has never been stronger. We continue to believe that we can have 15,000 Dunkin’ Donuts restaurants in the US, including approximately an additional 3,000 east of the Mississippi and 5,000 in the western part of the country. Notably this quarter, we opened our first restaurants in Denver, Colorado, and sold additional store development agreements in Southern California bringing the total to 70 restaurants planned for the Southern California region. Additionally, just last week we announced that we have begun to sell store development agreements for the central part of the state, including the Fresno, Bakersfield, Sacramento, and Santa Barbara areas.’’

In a separate statement, Dunkin’ Brands chief financial officer Paul Carbone said, “Because of the impact of write-downs related to our prior investments in the Dunkin’ Donuts joint venture in Spain, we believe we will be at the low-end of our $1.50 to $1.53 diluted adjusted earnings per share target for 2013.’’