Shares of coffee and donuts retailer Dunkin' Brands DNKN have slumped as much as 11% during Thursday morning trading. Investors are reacting to the company providing sales guidance that is below what analysts were expecting.
Dunkin' Brands is currently holding its "Investor and Analyst Day." In its investor relations presentation , Dunkin' shared its expected same-store-sales growth for Q3. The company forecasted growth of 1.1%, while analysts were expecting growth of 2.6%.
The company also shared its annual forecast, with expected same-store-sales growth of 1% to 3% at both its Dunkin' Donuts and Baskin-Robbins stores. Analysts had previously forecast 3.3% for Dunkin' Donuts and 2.7% for Baskin-Robbins. Dunkin' Brands also announced that Speedway will close 100 in-store Dunkin' Donuts self-serve kiosks by early 2016.
Here are some slides from the presentation that help outline why Dunkin' Brands is struggling and how it plans on moving forward in the future:
This is obviously disappointing news from Dunkin' Brands, and today's price movement has been painful. We might end up seeing some negative earnings estimate revisions following the lowered sales guidance. However, the company still has ambitious plans for the future and the potential for growth is still there. If this stock bottoms out, this may be a good time to buy in at a discounted price, but it has certainly been a volatile pick today.
(We are reissuing this article to correct a mistake. The original article should no longer be relied upon.)