Dunkin’ Brands Group, Inc. (DNKN, Financial) released its second quarter financial results this month. The company posted profit of $60.5 million that rose 18% on a year-over-year basis. Performance of both Dunkin' Donuts and Baskin-Robbins stores in the U.S were robust as the average ticket price was on the rise. The company beat earnings expectations in six of the previous seven quarters.
Diving into the numbers
The company’s adjusted earnings per share stood at 77 cents per share. The company’s quarterly revenue stood at $350.6 million, up 4.9% year-on-year. Higher franchisee fees, royalty income and advertisement fees more than offset the decline in ice cream and other products.
The company also saw comps growth of 1.4% in U.S. while international comps at Dunkin' Donuts stores jumped 4%.
The company’s adjusted operating income amounted to $199.8 million that rose 6.8% from the year-ago quarter. The company attributed this rise to a reduction in general and administrative expenses and also an increase in royalty income.
At the end of the quarter, the company had cash and cash equivalents of $367.9 million. As a matter of fact, accounts receivables stood at $128.9 million while its long-term debts were roughly $3 billion.
How Dunkin' Donuts and Baskin-Robbins fared?
In the U.S., Dunkin' Donuts posted quarterly revenues of $157.4 million that represent a 4.2% growth from the same period last year. Same-store sales during the same period spiked 1.4% due to an increase in average ticket price that remained unaffected by a decline in customer traffic.
The company's international segment registered revenue of $5.3 million, up 14% year on year. A rise in royalty income drove the segment’s revenue. In addition, comps improved 4%.
Shifting gears, Baskin Robbins witnessed a 1.1% decline in its revenue in the U.S. market because of a fall in royalty income as well as in the sales of ice cream and other products. However, the company’s franchise fees did rise but the same couldn’t create a favorable impact on the revenue. Same-store sales plunged 0.4% as compared to the year-ago quarter.
Baskin Robbins’ performance in the international sector remained flat from last year. While royalty and rental income rose from last year’s quarter, there was a fall in franchisee fees, ice cream and other products. Comps plummeted 2.5% versus a growth of 10% in the previous quarter.
Outlook
The company said it expects to have earnings between $2.68 and $2.72 per share for the whole year; its previous range being $2.69 to $2.74 a share. Further, the company anticipates its capital expenditure will be $45 million to $50 million, up from its previous guidance of $25 million.
Disclosure: I do not hold any position in the stock mentioned in this article.
