News

Dunkin' Brands gets a lift from Baskin-Robbins US sales

October 24, 2014

Dunkin' Brands reported its Q3 results Thursday, which included 2-percent comp store sales growth at Dunkin' Donuts, and a 5.8-percent jump at Baskin-Robbins US. Revenue was up 3.4 percent.

The company added 120 net new Dunkin' Donuts locations domestically.

Despite the results, CEO Nigel Travis said the company is feeling the impact from economic headwinds affecting the QSR segment, and with breakfast and coffee competition.

"In the face of these challenges, we are focused on driving balanced growth by capturing incremental beverage occasions through new product news, such as the launch of dark roast coffee, targeted discounting and leveraging innovation to deliver strong morning food results," he said during the earnings call. "Franchisee restaurant level economics remain highly-compelling as demonstrated by our strong third quarter restaurant growth including the addition of 120 net new Dunkin' Donuts in the U.S. We now believe that we can ultimately have more than 17,000 Dunkin' Donuts in the U.S., an increase of 2,000 restaurants over the initial long-term growth target that we provided at the time of our IPO in 2011."

Dunkin' Donuts US comparable store sales growth in Q3 was driven by higher traffic and increased average ticket resulting from product and marketing innovation, executives said.  Growth was driven by:

• Beverages, led by iced coffee, frozen beverages, and hot and iced espresso;
• Breakfast sandwiches and associated add-ons like hash browns, led by the return of the breakfast burrito and the spicy smoked sausage breakfast sandwich and the launch of the chicken biscuit in several markets;
• And by donuts including the Coffee Cream and Pumpkin flavors.

Ticket and traffic growth contributed equally to comparable store sales growth in the third quarter.

Baskin-Robbins US comparable store sales growth was driven by sales of cups & cones, cakes, and beverages as a result of the program offering guests a free waffle cone with the purchase of a second scoop of ice cream, while online ice cream cake ordering continues to drive cake sales.