Canton / MA. (db) Dunkin´ Brands Group Inc., parent company of Dunkin´ Donuts (DD) and Baskin-Robbins (BR), reported results for the first quarter ended March 31, 2012. «We are pleased with the performance of the business in the first quarter during which we had continued strong revenue and operating income growth. Our core Dunkin´ Donuts U.S. segment is thriving with 7,2 percent comp store sales growth and accelerating net development compared to the first quarter of 2011», said Nigel Travis, CEO Dunkin´ Brands Group Inc. and President Dunkin´ Donuts U.S. «We also recently announced several exciting strategic developments including an agreement with the Coca-Cola Company to serve its products in Dunkin´ Donuts and Baskin-Robbins restaurants in the U.S., an agreement with NBA star LeBron James to serve as a brand ambassador in select Southeast Asia markets for both brands and signing a partnership with Dallas Cowboys Owner Jerry Jones and Hall of Fame quarterback Troy Aikman to develop Dunkin´ Donuts restaurants in the Dallas/Fort Worth region».
Worldwide system-wide sales growth in the first quarter was primarily attributable to Dunkin´ Donuts U.S. comparable store sales growth (which includes stores open 54 weeks or more), global store development and growth in Baskin-Robbins international sales.
Dunkin´ Donuts U.S. comparable store sales gains in the first quarter were driven by increased average ticket and higher traffic resulting from strong beverage sales growth including gains across all cold beverages; differentiated breakfast and afternoon sandwich offerings such as the Angus Steak, Egg and Cheese Breakfast Sandwich and the Türkiye, Bacon and Cheddar and Ham and Cheese Bakery Sandwiches; sales of Dunkin´ Donuts K-Cup portion packs; and the «What Are You Drinkin´» marketing campaign.
Baskin-Robbins U.S. comparable store sales growth was driven by new product news around Valentine´s Day Cake Bites, a new «More Flavours, More Fun» advertising campaign and improved operational execution.
In the first quarter, Dunkin´ Brands franchisees and licensees opened 82 net new restaurants across the globe. This includes 45 net new Dunkin´ Donuts U.S. locations and 49 net new Baskin-Robbins International locations. Both Baskin-Robbins U.S. and Dunkin´ Donuts International experienced declining store counts in the first quarter. Additionally, Dunkin´ Donuts U.S. franchisees remodelled 108 restaurants during the quarter.
Revenues grew by 9,5 percent compared to the first quarter of 2011, primarily from increased royalty income driven by the increase in system-wide sales.
Operating income and adjusted operating income increased 10,4 million USD or 23,1 percent and 10,4 million USD or 19,8 percent, respectively, from the first quarter of 2011 primarily as a result of the increase in revenues and higher income from our joint ventures.
Net income and adjusted net income increased by 27,7 million USD and 21,1 million USD, respectively, compared to the first quarter of 2011 as a result of the increase in operating income and a decrease in interest expense associated with the re-financings completed last year and the repayment of our debt with the proceeds from our initial public offering.
Company Updates + Fiscal Year 2012 Targets
On March 05, 2012, the Company´s Board of Directors approved the initiation of a quarterly cash dividend with the first quarter cash dividend of 0,15 USD per share paid on March 28, 2012 to shareholders of record as of the close of business on March 19, 2012. The Company announced that the Board of Directors declared a second quarter cash dividend of 0,15 USD per share, payable on May 16, 2012 to shareholders of record as of the close of business on May 07, 2012. Additionally, as described below, the Company is increasing certain targets and reaffirming others that it has previously provided regarding its 2012 performance.
- It expects Dunkin´ Donuts U.S. comparable store sales growth to be in the range of four to five percent and Baskin-Robbins U.S. comparable store sales growth to be in the range of two to four percent.
- The Company continues to target opening 550 to 650 net new units globally. It expects that Dunkin´ Donuts U.S. will add between 260 and 280 net new restaurants and Baskin-Robbins U.S. will close between 60 and 80 restaurants. Internationally, the Company continues to target 350 to 450 net new units between the two brands.
- The Company is increasing its range for revenue growth to between seven and eight percent with adjusted operating income growth of between twelve and 14 percent. The targets for revenue and adjusted operating income growth are based on a 52-week year in 2011.
- The Company is increasing its range for adjusted earnings per share to 1,21 USD to 1,24 USD which would represent 29 to 32 percent growth over 0,94 USD adjusted earnings per share in 2011.
«The fundamentals of the business are extremely strong and we remain laser-focused on our strategic imperatives – operational excellence, brand-differentiating product innovation and world-class marketing», said Neil Moses, Dunkin´ Brands Chief Financial Officer. «We remain committed to delivering on our financial targets for the year and to enhancing shareholder value».
