Dunkin' Donuts iced coffee
Dunkin' Donuts iced coffee category experienced double-digit growth.

CANTON, MASS. — The Dunkin’ Donuts U.S. business posted a 5% increase in segment profit and a 2% growth in same-store sales in the third quarter ended Sept. 24. Companywide, net income rose 14% and revenues declined 1.3% for Canton-based Dunkin’ Brands, Inc.

Nigel Travis, Dunkin' Brands
Nigel Travis, chairman and c.e.o. of Dunkin’ Brands

“Our Dunkin’ Donuts U.S. business delivered solid comps for the quarter, fueled by record-breaking beverage sales, with double-digit growth in the espresso and iced coffee categories,” said Nigel Travis, chairman and chief executive officer of Dunkin’ Brands, when third-quarter results were given Oct. 20.

Segment profit for Dunkin’ Donuts U.S. was $119,434,000, up from $113,197,000 in the previous year’s third quarter. The growth was driven primarily by an increase in royalty income and an increase in other operating income due primarily to gains recognized in connection with the sale of company-operated restaurants, as well as a reduction in general and administrative expenses.

Segment total revenues for Dunkin’ Donuts U.S. were $152,425,000, down 1.3% from $154,370,000 in the previous year’s third quarter. A net decrease in the number of company-operated restaurants was one reason for the decline.

Dunkin' Donuts products
The Dunkin’ Donuts U.S. business posted a 5% increase in segment profit and a 2% growth in same-store sales.

For Dunkin’ Donuts International, comparable store sales slipped 1.4%, segment profit dropped 30% to $705,000 and revenues fell 3.8% to $4,449,000.

Companywide in the third quarter, Dunkin’ Brands had net income of $52.7 million, or earnings per share of 58c on the common stock, which was up 14% from $46.2 million, or 49c per share, in the previous year’s third quarter. Total revenues fell 1.3% to $207.1 million from $209.8 million.

For Baskin-Robbins U.S. in the third quarter, comparable store sales declined 0.9%, segment profit jumped 13% to $11,085,000 and total revenues rose 1.5% to $13,781,000. For Baskin-Robbins International, comparable store sales fell 2.9%, segment profit rose 19% to $11,154,000 and total revenues fell 8.8% to $27,904,000.

Baskin-Robbins sundaes, Dunkin' Brands
For the fiscal year, Dunkin’ Brands expects Baskin-Robbins U.S. comparable store sales growth to be slightly positive.

For the nine months ended Sept. 24, Dunkin’ Brands had net income attributable to Dunkin’ Brands of $139,456,000, or $1.52 per share, which was up 22% from $114,165,000, or $1.18 per share, in the same time period of the previous year. Nine-month total revenues were $613,184,000, which was up 10% from $607,136,000 in the same time period of the previous year.

For the fiscal year, Dunkin’ Brands expects Baskin-Robbins U.S. comparable store sales growth to be slightly positive, as compared to previous guidance of 1% to 3%. Comparable store sales growth for Dunkin’ Donuts U.S. should range from 0% to 2%.

Paul Carbone, Dunkin' Brands
Paul Carbone, c.f.o. of Dunkin’ Brands
“While the sale of our remaining company-operated restaurants drove a decline in revenues in the quarter, we are pleased to announce that we are now 100% franchised,” said Paul Carbone, chief financial officer for Dunkin’ Brands. “In regards to restaurant-level economics, we are particularly encouraged by first-year cash-on-cash returns that franchisees are experiencing in our high-opportunity west and emerging markets. We will continue to focus on driving franchisee profitability by better serving the customer, building high-margin beverage sales, lowering store construction costs and simplifying store operations. Additionally, sales of Dunkin' Donuts-branded consumer goods through locations outside our restaurants, including our recently announced ready-to-drink iced coffee line, should drive brand awareness, provide more opportunities for consumers to drink our coffee every day, and deliver profit-sharing income for our franchisees, including in our newest markets.”