Dunkin' to launch 'one of the most game-changing initiatives in our history'

by Monica Watrous
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Strong beverage sales boosted Dunkin' Brands in the recent quarter.

 

CANTON, MASS. — Dunkin’ Brands Group, Inc. is expanding its test of on-the-go ordering to more markets, including the New York metro area by mid-May. The platform enables Dunkin’ Donuts customers to use a mobile app to place orders, pay in advance and skip the line in the store. The initiative, which is currently being tested in Portland, Maine, and Boston, is expected to improve order accuracy and speed of service to drive profitability in participating restaurants.

“On-the-go ordering is one of the most game-changing initiatives in our history,” said Nigel Travis, chairman and chief executive officer of Dunkin’ Brands, during an April 28 earnings call with financial analysts. “Not only is it a way to drive membership in our loyalty program, but it is a clear demonstration of our commitment to enhancing convenience for our guests through technology-based initiatives. Later this year, we will test curbside delivery. We believe that curbside can add convenience for many guests, particularly in non-drive-thru locations, which makes up nearly half of our system.”

Dunkin’ Donuts also is testing delivery with third-party providers over the past few months, he added.

“Our goal is to eventually link the on-the-go and delivery architecture, a step that we believe can be very powerful in providing our guests even greater ease of use and access to the Dunkin’ Donuts brand,” Mr. Travis said. “Consumers are increasingly demanding convenience. And we are challenging ourselves to be a leader in this area, not only here in the U.S., but through the many tests we are carrying out in many markets for both brands internationally. When you total all this together, I believe we have a very clear digital vision.”

For the first quarter ended March 26, Dunkin’ Brands net income was $37,154,000, equal to 41c per share on the common stock, up 45% from $25,631,000, or 26c per share, in the prior-year period. Excluding special items, adjusted net income rose 1% over the prior year. Revenues increased 2.1% to $123,783,000 from $115,325,000.

Dunkin’ Donuts U.S. comparable store sales grew 2%, driven by strong sales of beverages and breakfast sandwiches.

“In the first quarter, we introduced one of the most successful food L.T.O.s ever — that’s the GranDDe Burrito,” Mr. Travis said. “Additionally, we brought back the Chicken Apple Sausage breakfast sandwich, which we introduced last year, and it also performed well. Both are proof that customers want premium breakfast sandwiches, as well as premium beverages and baked goods from Dunkin' Donuts.”

Baskin-Robbins U.S. comparable store sales grew 5%, driven by higher traffic.

“The brand’s comp store sales growth was fueled by all major product categories: the cups and cones category led the way, driven by the continued success of the double-scoop trade-up program, and our new warm ice cream cookie sandwich platform, which launched on March 1,” Mr. Travis said. “And on-line cake ordering continues be a great success. On-line orders were up greater than 20%. And by the end of the quarter, sales via on-line orders hit $10 million, an impressive feat in only the first two years of the program.”

For the full year, the company expects comparable store sales growth between flat and 2% at Dunkin’ Donuts U.S. and between 1% and 3% at Baskin-Robbins U.S. Additionally, the company expects revenue growth of between 4% and 6% and adjusted operating income growth of between 8% and 10%.
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