Dunkin’ Brands: Reports Q4 and Full Year 2012 Results

Canton / MA. (db) Dunkin´ Brands Group Inc., the parent company of Dunkin´ Donuts and Baskin-Robbins, reported results for the fourth quarter and fiscal year ended December 29, 2012. «The fourth quarter was strong and we finished 2012 delivering 15 percent plus adjusted operating income growth and nearly 40 percent adjusted earnings per share growth year-over-year», said Nigel Travis, Chief Executive Officer, Dunkin´ Brands Group Inc. and President, Dunkin´ Donuts U.S. «We have the unique combination of strong brand heritage and significant U.S. and global restaurant expansion opportunities, which we are capitalizing on to drive profitable growth for both our franchisees and shareholders. Our contiguous, strategic development approach is working and we´re excited to begin selling Dunkin´ Donuts franchises in California. Despite macro-economic instability and a tough competitive environment, consumer and franchisee demand for Dunkin´ Donuts is high, our franchisee relationships are strong and we continue to leverage our asset-light business model giving us confidence to target 15 percent plus adjusted earnings per share growth in 2013».

Fourth quarter highlights include:

  • 3,2 percent Dunkin´ Donuts U.S. comparable store sales growth
  • Added 256 net new restaurants worldwide including 149 net new Dunkin´ Donuts in the U.S.
  • Adjusted operating income up 16,1 percent on a 13-week basis
  • Adjusted operating income margin to 47,6 percent
  • Adjusted EPS up approximately 21 percent to 0,34 USD on a 13-week basis

Fiscal year 2012 highlights include:

  • Added 665 net new restaurants worldwide including 291 net new Dunkin´ Donuts in the U.S.
  • Revenue up 6,1 percent and adjusted operating income up 15,3 percent on a 52-week basis
  • Adjusted operating income margin to 46,3 percent
  • Adjusted EPS up approximately 38 percent to 1,28 USD on a 52-week basis
  • Board of Directors declare 0,19 USD first quarter dividend for a 27 percent increase over the Company´s fourth quarter 2012 dividend

Company Updates

  • On January 16, 2013, the Company announced that Dunkin´ Donuts is expanding to Southern California. The Company is recruiting multi-unit franchisees for Los Angeles, Riverside, San Diego, San Bernardino, Ventura and Orange counties and expects restaurants in these markets will begin to open in 2015.
  • The Company today announced that the Board of Directors declared a first quarter cash dividend of 0,19 USD per share, payable on February 20, 2013 to shareholders of record as of the close of business on February 11, 2013.
  • The Company today announced that it intends to seek a re-financing of its senior secured credit facilities given the current favourable credit market conditions.

Fiscal Year 2013 Targets

As described below, the Company is providing certain targets regarding its 2013 expectations.

  • The Company expects Dunkin´ Donuts U.S. comparable store sales growth of three to four percent and Baskin-Robbins U.S. comparable store sales growth of one to three percent.
  • The Company expects that Dunkin´ Donuts U.S. will add between 330 and 360 net new restaurants for 4,5 to five percent net unit growth and it expects Baskin-Robbins U.S. will have between zero and 30 net closures.
  • Internationally, the Company targets opening 400 to 500 net new units across the two brands. Globally, the Company expects to open between 700 and 860 net new units.
  • The Company expects revenue growth of between six and eight percent and adjusted operating income growth of between ten and twelve percent.
  • The Company expects adjusted earnings per share of 1,48 USD to 1,51 USD, which would represent 15,6 percent to 17,9 percent year-over-year adjusted earnings per share growth (earnings per share guidance does not reflect any potential benefit from refinancing).

«Our nearly 100-percent, asset-light franchised business model enables us to accelerate our strong restaurant growth rate, while simultaneously returning cash to shareholders», said Paul Carbone, Chief Financial Officer. «The Board´s decision to increase our dividend 27 percent in just our second year as a public company further underscores our commitment to delivering shareholder value».

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