Dunkin' Donuts CEO to Short-Seller Jim Chanos: You're Wrong
Dunkin' is hot off a solid first quarter.

Let the war of words begin. 

Dunkin' Brands Group (DNKN) had little time to celebrate its better than expected first-quarter on Thursday as headlines erupted early that noted short-seller Jim Chanos has bet against the company. Chanos said in a TV interview that he has been short shares of Dunkin' and Burger King/Tim Horton's owner Restaurant Brands International (QSR) for about a year. Chanos' main contention: valuations for the two fast-food heavyweights are too high and he thinks it's better for restaurants to own their own real estate, rather than franchise. 

Dunkin' shares, which had popped on a 9 cent earnings beat, quickly reversed course on the comments and traded down 5%. Shares were relatively unchanged in afternoon trading following an upbeat conference call by Dunkin's executive team. 

"We continue to have spectacular numbers," Dunkin' Brands Group CEO Nigel Travis told TheStreet. "People should say what they feel, he [Chanos] is wrong." Chanos told TheStreet via email Dunkin's reaction isn't too surprising. 

Dunkin's stock over the past year has gained about 13%, suggesting Chanos is underwater with his short position. 

To be sure, Dunkin' did its part to make anyone looking to bet against its stock off Chanos' comments think twice. 

Dunkin's first-quarter earnings beat Wall Street forecasts by 9 cents. Adjusted operating profit margins rose 60 basis points from the prior year to 31.8%. The company took the wraps off a new $650 million stock repurchase program. In turn, Dunkin' hiked its full year profit outlook to $2.49 to $2.59 a share from $2.20 to $2.29 a share. 

Two feathers in Chanos' cap: traffic continued to be under pressure at Dunkin' and same-store sales at the coffee chain fell 0.5% as it worked through simplifying its menu. 

More from Investing

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever

McDonald's Criticized for Not Doing More in Wake of Sexual Harassment Claims

McDonald's Criticized for Not Doing More in Wake of Sexual Harassment Claims

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%