Operations
Dunkin' Brands pulls off Q1 EPS feat by beating analysts estimates
April 30, 2020
Dunkin' and Baskin-Robbins parent, Dunkin' Brands Group Inc., pulled off a first quarter surprise, reporting adjusted earnings of 67 cents, that beat analysts estimates, showing how QSR drive-thru brands can survive, even in a pandemic.
The COVID-19 outbreak however resulted in a 2% quarterly drop in U.S. comp store sales, after same-store business in March fell off the table. Over the last three weeks of the quarter in March, sales fell 19.4% after having trended up 3.5% the previous 10 weeks of the quarter.
Baskin-Robbins U.S. comp store sales grew 1.8% over the quarter, though those sales had been soaring upward 11% as well in the quarter's first 10 weeks. Then COVID-19 slammed into the nation and comp store sales for the brand fell 23.3% in the last three weeks of the quarter.
"Prior to the crisis, we experienced strong first quarter performance across the system, including Dunkin U.S., which was on track to have its highest quarterly comps in more than six years and positive traffic," Dave Hoffman, CEO of Dunkin Brands, said in the report. "
He said the company shifted focus to the safety of its employees and solidarity with its franchisees, and thanked the federal government for supporting small businesses, which included many of the franchisees.
Hoffmann also said that Dunkin' Brands management team and board are voluntarily taking salary and fee reductions, with the savings generated going to the Dunkin' Brands Family Fund to supports store crew members in times of crisis.
- 1.3% Q1 revenue growth to $4.1 million.
- 38 net new stores globally.
- 0.2% global systemwide sales decline.
- 1.8% Baskin-Robbins U.S. comparable store sales growth.
- Flat operating income and adjusted operating income at $101.3 million and $106.0 million, respectively.
- Flat net income and adjusted net income at $52.1 million and $55.5 million, respectively.
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