Weather factors weigh on Dunkin’ earnings
CANTON, MASS. — Adverse weather conditions contributed to an 8% drop in earnings during the first quarter at Dunkin’ Brands Group, Inc. Net income in the first quarter ended March 30 was $23,798,000, equal to 22c per share on the common stock, down from $25,950,000, or 22c per share, in the first quarter of fiscal 2012. Adjusted net income in the quarter was $31,145,000, up 2% from $30,623,000 in the same period a year ago.
Total revenues were $161,858,000, up 6% from $152,372,000, while operating income at Dunkin’ in the first quarter increased 15% to $63,459,000 from $55,195,000.
“Our business is strong, and we remain confident with our full-year financial targets for 2013, despite the significant impact weather had on both Dunkin’ Donuts and Baskin-Robbins in the U.S. during the first quarter,” said Nigel Travis, chief executive officer of Dunkin’ Brands Group, Inc. “Our U.S. restaurant operations have never been better, and our guest satisfaction survey results are the highest in recent brand history. We’re encouraged by our momentum as we enter the second quarter and look forward to the start of key warmer weather selling seasons for both of our brands.”
Dunkin’ Donuts U.S. had operating profit of $86,855,000 and total revenues of $119,634,000 in the first quarter, which compared with $79,941,000 and $111,054,000, respectively, in the same period a year ago.
The company said Dunkin’ Donuts U.S. comparable store sales grew 1.7% in the first quarter. First-quarter gains were driven by “increased average ticket resulting from guests purchasing more units per transaction, including add-on items such as hash browns and Turbo Shots, and positive mix as guests purchased more premium-priced limited time offer breakfast sandwiches and beverages, such as the Turkey Sausage Breakfast Sandwich, the Angus Steak Breakfast Sandwich, Dark Hot Chocolate, and Irish Creme flavors. Donut and K-Cup sales were strong in the quarter driven by the Brownie Batter Heart Shaped Donuts, the Irish Creme Donut, and the launch of Dunkin’ Donuts Caramel K-Cups.”
Dunkin’ added traffic growth in the quarter was impacted significantly by weather in its core markets. Overall, transactions ended the quarter nearly flat, Dunkin’ said, with weather estimated to have negatively impacted comparable store sales by approximately 120 basis points versus the prior year.
Baskin-Robbins U.S. operating profit was $5,766,000, up 6% from $5,457,000 in the same period a year ago. Total revenues were $9,612,000, down 2% from $9,852,000.
Dunkin’ Donuts International posted operating profit of $2,558,000, down 19% from $3,161,000, in the same period a year ago. Total revenues were $4,623,000, up 17% from $3,948,000. Dunkin’ attributed the decline in operating profit to a decline in income from its South Korea joint venture as a result of non-cash charges, losses realized from a new joint venture in Spain, and continued investments in personnel for the Dunkin’ Donuts International business.
Baskin-Robbins International first-quarter 2013 segment profit was $9,319,000, up 28% from $7,282,000, while total revenues increased 5% to $25,428,000 from $24,241,000.