Dunkin’ Brands Group posted results for the second quarter that had earnings in line with estimates on Wall Street, but revenues were lower than expected.
The share price at the company dropped by nearly 5%, as it announced it was lowering its 2014 guidance, after the quarter had been softer than expected.
The adjusted earnings at the donut maker were 47 cents a share and in line with estimates. Last year during the same reporting period, earnings were 41 cents a share. Higher revenues this year were the biggest reason for the increase.
The revenues were up 4.6% compared to the same reporting period in 2013, to over $190.8 million primarily driven by an increased amount of royalty income because of sales growth system wide.
However, revenue missed estimates on Wall Street of $199 million by over 4%.
Dunkin’ Brands operates through its Baskin-Robbins and Dunkin’ Donuts brands.
Comps (comparable same-store sales) system-wide were up 5.7%, which was higher than the same period last year of 5.5%. The growth in comps was primarily because of store development globally and comparable store sales increases in Dunkin’ Donuts in the U.S.
Same store sales growth was up 1.8% in the U.S. division, compared to a growth of 4% during the same period one year ago. However, the decline was due to all of the company owned restaurants being sold in the Atlanta market during the second quarter.
In the international division of Dunkin’ Donuts, comps fell 3.1%, compared to a drop of 1.7% during the same period last year. Poor results from South Korea led to most of the decline.
Same store sales in Baskin Robbins for the U.S. division were up 4.2% compared to an increase last year during the same period of 1.6%.
The international division at Baskin Robbins saw its comps fall 1.6%, which was compared to an increase of 2.6% for the same period one year ago. Japan’s poor performance led to the drop in international comps.
Dunkin’ Brands franchisees as well as licensees opened over 150 new restaurants globally. Included in that total were 75 new Dunkin’ Donuts location in the U.S., 47 international Baskin Robbins locations, 17 international Dunkin’ Donuts location and 12 U.S. Baskin Robbins locations.
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