The operator of Dunkin' Donuts and Baskin-Robbins reported Thursday that earnings rose 15.4% from the prior year to 60 cents a share, surpassing Wall Street estimates of 58 cents. Net sales came in a bit light, falling 1.3% from a year ago to $207.1 million. Analysts anticipated $214.8 million.
Despite consumers continuing to eat at home amid falling prices at grocery stores, the Dunkin' Donuts chain had a bounceback quarter. Same-store sales rose 2%, beating estimates for a 1.3% increase. In the second quarter, the coffee and donut chain's sales rose a meager 0.5%. Dunkin' CEO Nigel Travis gave a shout out to strong sales of coffee, an area where he has led a push into pricier lattes and iced coffee drinks such as cold brew.
"Our Dunkin' Donuts U.S. business delivered solid comps for the quarter, fueled by record-breaking beverage sales, with double-digit growth in the espresso and iced coffee categories," said Travis.
The pricier lines of coffee helped Dunkin' Donuts overcome another quarter of weak traffic, which served as a reminder that it remains challenging out there right now in the fast food space.
The solid quarter at Dunkin' Donuts masked continued weakness at ice cream brand Baskin-Robbins in the U.S. Same-store sales at Baskin-Robbins fell 0.9%, missing forecasts for a 0.5% increase. Growth in sales of ice cream cups and cones and cones weren't enough to offset sales drops in iced beverages and sundaes.
Meanwhile, Dunkin' Brands still sees same-store sales at its U.S. donut chain rising as much as 2% this year. At Baskin-Robbins, same-store sales in the U.S. are seen slightly higher this year, a reduction from a previous estimate for 1% to 3% growth. Earnings guidance was reiterated in a range of $2.20 to $2.22 a share.