Shares of Dunkin’ Brands Group (NASDAQ: DNKN) are trading 2% lower on Thursday after the Company topped earnings expectations but fell short on revenue for its second quarter.
Dunkin delivered earnings of USD 0.86 per share, beating the analyst consensus estimate of USD 0.82. Revenue grew 2.5% versus the year-quarter prior, to USD 359.3 Million. This narrowly missed expectations of USD 360.68 Million.
The coffee chain said same-store-sales grew 1.7% in the U.S. as customers gravitated towards premium priced espresso and cold brew drinks. Comparable sales at Dunkin’s ice cream chain, Baskin-Robbins, fell 1.4% due to a decrease in customer traffic.
Dunkin’ franchisees and licensees opened 109 net new restaurants during the second quarter. This includes 57 net new Dunkin’ locations and 52 Baskin-Robbins stores. The Company said it also revamped 42 stores, including 30 Dunkin’ U.S. locations and 12 Baskin-Robbins locations.
For the full year, Dunkin’ said it expects low-single digit same-store-sales growth for Dunkin’ U.S. Following lackluster Q2 ice-cream sales, Baskin-Robbins U.S. comparable sales growth is expected to be flat to “slightly” negative.
The Company is calling for adjusted earnings of USD 3.02 to USD 3.05 per share for fiscal 2019. Last year Dunkin’ delivered EPS of USD 2.90.
David Hoffmann, Dunkin’ Brands Chief Executive Officer and President of Dunkin’ U.S., said he is pleased with the progress the Company is making in accordance with its three-year strategy. The plan, announced in 2018, focuses on digitization, menu innovation, restaurant growth, “restaurant excellence” and brand evolution.
Shares of Dunkin’ Brands have gained 22% this year versus top competitor Starbucks Corp. (NASDAQ: SBUX), up 49%.