Dunkin' Brands Group, Inc.
) posted second quarter 2012 earnings of 33 cents per share, in
line with the Zacks Consensus Estimate but higher than the year-ago
quarter earnings of 25 cents. On a reported basis, the company
earned 15 cents per share compared with a loss of 4 cents in the
Total revenue came in at $172.4 million, up 9.8% year over year,
driven by an increase in comps across all the segments. Revenue
also surpassed the Zacks Consensus Estimate of $170 million.
Within the segments, Dunkin' Donuts comparable sales grew 4.0% and
3.5% in U.S. and in the international market, respectively. The U.S
business comps were driven by increased average ticket, innovative
menu offerings and higher customer traffic.
On the other hand, comparable sales for Baskin-Robbins increased
4.6% and 1.5% in U.S. and in the international market,
respectively. The U.S business comps were driven by introduction
and re-launch of new menu items.
DUNKIN BRANDS (DNKN): Free Stock Analysis
YUM! BRANDS INC (YUM): Free Stock Analysis
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In the reported quarter, operating income plunged 25.3% year over
year to $46.1 million, driven by an increase in the legal reserve
related to the Bertico litigation and some costs related to the
closing of the Canada-based ice cream manufacturing plant,
partially offset by higher revenues.
In the second quarter, the company's franchisees and licensees
opened 140 new restaurants worldwide, including 29 Dunkin' Donuts
in international market and 19 U.S. locations and 87 Baskin-Robbins
international locations and 5 U.S. locations. In addition, Dunkin'
Brands' U.S. franchisees remodeled 156 restaurants during the
During the quarter, Dunkin' Brands announced the closing of its
Baskin-Robbins segment's Canadian ice-cream manufacturing plant in
October 2012. As of June 30, 2012, the company owned 10,169 Dunkin'
Donuts restaurants and 6,847 Baskin-Robbins restaurants worldwide.
Dunkin' Brands ended second quarter 2012 with cash and cash
equivalents of $218.7 million and shareholders' equity of $755.1
million. Long-term debt at the end of the quarter was $1,442.3
Share Repurchases & Dividend
In the reported quarter, the company authorized to repurchase
shares worth up to $500 million. The authorization is granted for a
period of two years.
Dunkin' Brands announced a dividend of 15 cents per share for third
quarter 2012, payable on August 24, 2012 to shareholders of record
as of August 6, 2012.
The company reaffirmed its comps, revenue and operating income
guidance for 2012. Dunkin' Brands anticipates comps increase for
Dunkin' Donuts U.S in the range of 4%-5% and for Baskin-Robbins
U.S. in the range of 2%-4%. Revenue growth is expected to be in the
range of 7%-8% and operating income increase in the range of
However, Dunkin' Brands increased its adjusted earnings per share
guidance for 2012. The company now expects adjusted earnings in the
range of $1.22 to $1.25 per share, up from the previous guidance of
$1.21 to $1.24. The optimism reflects Dunkin' Brands' consistent
comps growth and strong performance in the reported quarter.
In addition, the company expects worldwide unit growth in the range
of 600 to 700. It reaffirmed its guidance of adding 260- 280
Dunkin' donuts U.S restaurants and now expects to close around
40-60 Baskin-Robbins U.S restaurants (previous range was 60 to 80
net closures). On the international front, the company expects to
open 400 to 450 new units across the two brands, up from the
previous range of 350 to 450.
Canton, Massachusetts-based Dunkin' Brands remains focused on its
expansion plan, marketing innovation and menu innovation. Based on
this, we expect analysts to revise their estimates upward in the
coming days. Currently, the Zacks Consensus Estimate for 2012 and
2013 are pegged at $1.25 and $1.45, respectively.
Dunkin' Brands competes with the likes of
Yum! Brands, Inc.
), which reported its second quarter 2012 adjusted earnings of 67
cents per share, missing the Zacks Consensus Estimate by 3 cents.
Dunkin' Brands currently carries a Zacks #2 Rank, implying a
short-term Buy rating. We also reiterate our long-term Neutral
recommendation on the stock.