Dunkin' Brands Posts Results That Top Estimates

Dunkin' Brands Group shares hit a new 52-week low yesterday after further investor reaction to weak same-store sales growth at the Canton company's U.S. Dunkin' Donuts stores.

Dunkin' Brands had net income for the quarter ended September 26 of $46,216,000, equal to 49c per share on the common stock, down 16% from $54,697,000, or 52c per share, for the year-ago period.

Analysts were expecting earnings per share of 51 cents with revenue reaching $204 million.

Dunkin Brands Group Inc (NASDAQ:DNKN) issued an update on its FY15 earnings guidance on Thursday morning. "While we were disappointed with our third quarter Dunkin' Donuts USA comparable store sales, we remain on track to deliver our full-year targets, and we are working closely with our franchisees to regain transaction momentum through great products, exceptional guest service, and innovative marketing", says Dunkin' Brands Chairman and Chief Executive Officer Nigel Travis.

Separately, TheStreet Ratings team rates DUNKIN' BRANDS GROUP INC as a Buy with a ratings score of B-. Earnings, adjusted for one-time gains and costs, came to 52 cents per share. The Company franchises restaurants under its Dunkin Donuts and Baskin-Robbins brands. The Company operates in four segments: Dunkin Donuts US, Dunkin Donuts global, Baskin-Robbins worldwide and Baskin-Robbins United States.

Revenue overall climbed by 8.9% to end the quarter at $209.8 million.

Dunkin' Donuts USA has 68 net opening during the quarter to take the number of distribution points up 4.6% Y/Y to 8,308. Comparable store sales increased 7.5% for the quarter, driven primarily by higher traffic as well as increased sales of cups and cones, beverages, desserts, sundaes and cakes.

Dunkin' Donuts' mobile app failed several times on Columbus Day, prompting the company to advise its 3.6 million DD Perks members to open the app a few minutes before entering a Dunkin'.

Dunkin' shares have decreased roughly 4 percent since the beginning of the year. Additionally, Dunkin' Donuts US franchisees remodeled 116 restaurants and Baskin-Robbins USA franchisees refurbished 32 outlets during the quarter.

The parent company for both Baskin-Robbins and Dunkin' Donuts has posted sales growth of a modest rate the past few quarters amidst a competitive environment for breakfast and a challenging economy. BTIG Research initiated coverage on Dunkin Brands Group in a research report on Wednesday, July 15th.

The consensus target price for the stock has gone down significantly, following the earnings release and now stands at $48.85; this indicates an upside of roughly 23% from the stock's last closing price.

Tybourne Capital Management Hk Ltd had the biggest stake with ownership of 2.24 million shares as of Q2 2015 for 10.45% of the United States long equity exposure.