Dunkin' Sales Disappoint as Same-Store Sales Drag The company missed expectations due to weak sales at Dunkin' Donuts in the U.S. and Baskin-Robbins' struggles abroad.
By Kate Taylor
Opinions expressed by BIZ Experiences contributors are their own.
Dunkin' Brands' quarterly report wasn't as sweet as the donut giant expected.
The company today posted second-quarter sales that fell short of expectations due to weak same-store sales at Dunkin' Donuts in the U.S. and Baskin-Robbins' struggles abroad. It also cut its full-year forecast in a sign that more weakness is to come.
Dunkin' Brands reported a second-quarter profit of 47 cents a share, in line with analysts' estimates. Revenue for the quarter rose to $190.9 million from $182.5 million a year ago, but missed the $198.5 million analysts were expecting.
Related: Dunkin' Donuts Franchisees Forced to Raise Coffee Prices
Same-store sales at U.S. Dunkin Donuts rose only 1.8 percent, compared to 4 percent in the same period last year, with the company attributing the slower growth to "macroeconomic challenges" across the retail and fast-food industries as well as a cold and rainy spring. Dunkin' Donuts American market makes up around 75 percent of the company's total revenue.
Baskin-Robbins was also to blame for the weak quarter. The chain, which has thrived internationally despite the fact that there are only a handful of stores open in the U.S., failed to reach its anticipated profit this quarter. The Baskin-Robbins joint venture in Japan didn't perform as well as expected, says Dunkin's CFO Paul Carbone, and overall ice cream profits were down for Baskin-Robbins International.
While Dunkin' Brands still expects Baskin-Robbins to achieve full-year same-store sales to grow 1 to 3 percent, it now expects same-store sales at U.S. Dunkin' Donuts to grow 2 to 3 percent for the year, down from an earlier forecast of 3 to 4 percent. The company also lowered its full-year profit and revenue targets.
