Dunkin' Beats Forecasts, Defers Dividend as It Talks to Inspire

Dunkin' Brands defers a fourth-quarter cash dividend as it continues acquisition talks.
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Dunkin' Brands  (DNKN) - Get Report beat Wall Street's third-quarter earnings estimates Thursday as the fast food restaurant company negotiates a potential acquisition deal with a private-equity firm.

Shares of the Canton, Mass.-based operator of the doughnut chain and Baskin-Robbins ice cream stores were off slightly to $100.69.

The company reported net income of $74 million, or 89 cents a share, compared with $72.4 million, or 86 cents a share, a year ago. Adjusted per-share earnings came to 93 cents, beating FactSet's call for 80 cents.

Revenue totaled $361.5 million, up from $355.9 million a year ago, and ahead of FactSet's consensus of $345 million. U.S. same-store sales rose 0.9%, while the FactSet forecast was for a decline of 3.8%.

Dunkin' said it ended the third quarter with $341 million of unrestricted cash held in the U.S., excluding cash reserved for gift cards and advertising funds.

"In response to changing consumer patterns, we moved quickly to adapt our menu, introducing new beverages and snacking items designed to appeal to both morning and afternoon traffic, as well as younger consumers," CEO Dave Hoffman said in a statement. "We also doubled down on digital, leveraging the strength of our assets to give customers an even faster, frictionless experience."

Dunkin' said on Sunday that it was looking at a potential $9 billion sale to Inspire Brands, which is listed as a portfolio holding of Roark Capital

"There is no certainty that any agreement will be reached," the company said. "Given the ongoing discussions, the board of directors has decided to defer action with respect to a cash dividend for the fourth quarter."