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Dunkin' Brands (DNKN) Q1 Earnings Beat, Sales Lag Estimates

Zacks Equity Research

Dunkin' Brands Group, Inc. DNKN operates through its Dunkin’ Donuts and Baskin-Robbins brands that serve hot and cold coffee and baked goods, as well as hard-serve ice cream.

Going forward, the company’s comps should gain from menu innovation and unit expansion plans. Moreover, various sales and digital initiatives undertaken by the company bode well. Further, the company’s renewed multi-year partnership with Keurig Green Mountain and J.M. Smucker, to manufacture, market, distribute and sell Dunkin' K-Cup pods to retailers in the U.S. should continue to aid Dunkin Brands’ top line. The company’s focus on expanding its beverage portfolio also provides it with a great growth opportunity.

However, challenging comps growth in international markets at both its divisions is a potent headwind. Further, immense competition in the breakfast segment and lower-than-expected sale in ice-cream products could hurt the company’s top line in the near term.

Investors should note that the consensus estimate for DNKN has been stable over the last 60 days. Meanwhile, DNKN’s earnings have been strong over the past few quarters. In fact, the company posted positive earnings surprises in all of the last four quarters, with an average beat of 3.56%. However, revenues surpassed estimates in two of the trailing four quarters.

Dunkin' Brands Group, Inc. Price and EPS Surprise

Dunkin' Brands Group, Inc. Price and EPS Surprise | Dunkin' Brands Group, Inc. Quote

DNKN currently has a Zacks Rank #4 (Sell) but that could change following Dunkin' Brands earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: DNKN beats on earnings. Our consensus earnings estimate called for earnings per share of 48 cents per share, and the company reported earnings of 54 cents per share. Investors should note that these figures take out stock option expenses.

Revenues: DNKN reported revenues of $190.7 million. This missed our consensus estimate of $192 million.

Key Stats to Note: In the first quarter, Dunkin’ Donuts U.S. comps remained flat while the international division posted a 0.2% decline. Baskin-Robbins’ U.S. comps declined 2.4%, while the international segment posted a 2.0% decrease.

Stock Price Impact: In-active in pre-market trading.

Check back later for our full write up on this DNKN earnings report!

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