Dunkin’ Brands eexecs blamed bad weather and tough competition for the disappointing Q1 financials reported by Dunkin’ Donuts and Baskin-Robbins. In the U.S., comparable stores sales fell 0.5 percent for Dunkin’ Donuts U.S., while Baskin Robbins’ sales fell 1 percent, a news release said.
The company’s board declared a quarterly cash dividend of $0.3475 per share of common stock, payable June 6 to shareholders of record as of May 29. Other Q1 results include:
- Revenues grew 1.7 percent.
- Diluted EPS increased 9 cents to $0.57.
- Diluted adjusted EPS increased 11 cents to $0.62.
The company also entered into $650 million accelerated share repurchase agreement, while Dunkin’ Donuts completed a complete menu simplification rollout in the U.S. Globally, Dunkin’ Donuts and Baskin-Robbins added 71 net new locations including 56 in the U.S
“In the first quarter of 2018, we made great headway with numerous strategic growth initiatives, including … unveiling of our next-generation Dunkin’ Donuts store design and surpassing $220 million in retail sales of CPG products across both brands,” Chairman and CEO Nigel Travis, said in the release. “These accomplishments were achieved against a tough backdrop of intense competitive activity and adverse weather, which, along with the national roll-out of menu simplification, negatively impacted Dunkin’ Donuts U.S. comparable store sales. Going forward we believe we have the right plans in place, as well as the full alignment of our franchisees, to position ourselves for growth both now and for the long-term.”
As far as 2018 performance, the company now expects GAAP diluted earnings per share of $2.49 to $2.58 (previously it expected $2.20 to $2.29) and diluted adjusted earnings per share of $2.69 to $2.74 (previously it expected $2.40 to $2.45), which reflects the impact from the revised share count and full-year effective tax rate and excludes any impact of the $100 million investment in the Blueprint for Dunkin’ Donuts U.S. Growth.
“We are pleased with the progress we made in the first quarter with our plan to transform Dunkin’ Donuts U.S. into a beverage-led, on-the-go brand,” Dunkin’ Donuts U.S. President Dave Hoffmann, said in the release. “Not only did we complete the national roll out of menu simplification, which should improve customer service and franchisees’ profitability, but we also had record-breaking breakfast sandwich sales, saw an improvement in our afternoon traffic as a result of our PM beverage break offers, conducted successful value menu tests leading to a national launch in April, and drove flavored coffee and espresso sales with our innovative Girl Scout partnership.”
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