Dunkin’ Brews Up a Fourth-Quarter Earnings Beat

Dunkin’ Brands serves up better-than-expected earnings amid ongoing demand for specialty coffees and premium sandwiches.
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Doughnut and coffee chain and Baskin-Robbins ice cream owner Dunkin’ Brands  (DNKN) - Get Report on Thursday reported better-than-expected fourth-quarter earnings amid ongoing demand for specialty coffees and premium sandwiches and at B&R, ice cream.

The Canton, Mass.-based company posted adjusted net income of $61.2 million, or 73 cents a share, in its fourth quarter ended Dec. 28, vs. $57.3 million, or 68 cents a share, in the comparable year-ago quarter. Analysts polled by FactSet had been expecting per-share earnings of 70 cents.

Sales rang in at $335.9 million, up from $319.6 million a year ago though a few servings shy of analysts’ forecasts of $336.1 million. Same-store sales within Dunkin’ Donuts gained 2.8%, while same-store sales among Baskin-Robbins outlets grew 4.1%, the company said.

"All business segments delivered positive comparable store sales growth in the fourth quarter and for the fiscal year, reflecting broad-based momentum across the system," CEO Dave Hoffmann said in a statement, noting the company achieved "the highest quarterly comparable sales growth in six years, fueled by espresso and cold brew sales, coupled with the successful launch of the Beyond Sausage sandwich.”

Global systemwide sales growth was 6% in the quarter.

The company offered up guidance for 2020, saying it expects full-year earnings per share of between $3.16 and $3.21 on an adjusted basis. Capital expenditures, including costs to continue retrofitting its franchisee operations, are expected to be approximately $40 million.

It expects to open between 200 and 250 net new stores this year, and sees “low-single-digit” comparable-store sales growth for Dunkin' U.S. For Baskin-Robbins, the company also expects low-single digit comparable store sales growth, and anticipates closing net 25 stores.

Separately, Dunkin’ Brands increased its quarterly dividend to 40.25 cents a share and the board approved a new stock buyback program of up to $250 million.

Shares of Dunkin’ Brands were down 3.2% at $74.75 in morning trading on Thursday.