Dunkin' Post Earnings Beat but Coronavirus Slams Same-Store Sales

Dunkin' posts first-quarter results that beat analysts' forecasts, though it records a steep drop in March same-store sales as the coronavirus pandemic took hold.
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Dunkin' Brands  (DNKN) - Get Report posted first-quarter results that beat analysts’ forecasts as the donut and coffee fast-food chain managed to continue pumping out the coffee and donuts amid the coronavirus pandemic and subsequent economic shutdown - though registered a steep drop-off in sales in the final three weeks of the quarter.

The Canton, Mass.-based company said it earned $52.1 million, or 67 cents an adjusted share, vs. $52.3 million, or 67 cents a share, in the comparable year-ago quarter. Analysts polled by FactSet had been expecting earnings of 62 cents.

Sales rang in at $323.1 million vs. $321.9 million a year ago. Analysts had been expecting sales more in the range of $310.6 million.

Comparable same-store sales, a key metric among retail and restaurant chains, fell 2%, though Dunkin’ noted that the same figure was a positive 3.5% in the first 10 weeks of the quarter before the pandemic prompted large-scale shutdowns across the U.S.

On the Baskin-Robbins ice-cream side of the business, comparable- store sales gained 1.8% in the first quarter as an increase in average ticket was partially offset by a decrease in traffic, also concentrated in the final three weeks of the quarter, Dunkin' said.

Indeed, for Dunkin' overall, same-store sales plunged 19.4% in the final three weeks of March, even as the company armed its franchisees with masks, protective equipment and plexiglass to continue serving customers.

Dunkin’ said it was pulling its fiscal 2020 guidance as it continues to assess the impact of Covid-19 on its business. The company also said it was suspending its dividend, which it said will result in cash savings of approximately $33 million in the second quarter.

Shares of Dunkin' were down 1.24% at $63.89 in trading on Thursday.