NEW YORK (TheStreet) -- Dunkin' Brands
(DNKN - Get Report) shares are falling, down -2.7% to $46.52 in trading on Thursday, following the release of the company's first quarter 2014 earnings report.
The company missed analysts earnings guidance of 36 cents per share by 3 cents.
"We had a difficult first quarter with our comparable store sales growth in the U.S. significantly impacted by severe weather in the regions of the country where most of our Dunkin' Donuts restaurants are located. However, we remain confident that we will hit our targets for the full year," said CEO Nigel Travis.
The Dunkin' Donuts and Baskin Robbins franchiser's year over year quarterly revenue was up 6.9% to $171.9 million, missing analysts estimates of $172.2 million.
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TheStreet Ratings team rates DUNKIN' BRANDS GROUP INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DUNKIN' BRANDS GROUP INC (DNKN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.8%. Since the same quarter one year prior, revenues rose by 13.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 26.76% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- DUNKIN' BRANDS GROUP INC has improved earnings per share by 21.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DUNKIN' BRANDS GROUP INC increased its bottom line by earning $1.36 versus $0.94 in the prior year. This year, the market expects an improvement in earnings ($1.82 versus $1.36).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 22.5% when compared to the same quarter one year prior, going from $34.34 million to $42.07 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, DUNKIN' BRANDS GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: DNKN Ratings Report