CANTON, Mass. (AP) -- The parent company of Dunkin' Donuts and Baskin-Robbins said Thursday that its first-quarter earnings fell 8 percent as a refinancing charge and higher interest costs offset revenue gains from franchise growth.
A jump in royalty income and increased franchise fees helped revenue climb more than 6 percent. A total of 78 new Dunkin' Donuts restaurants have been added to the U.S. market since the year started. Chief Financial Officer Paul Carbone said in a statement that expanding the Dunkin' Donuts brand across the United States is the "engine" for Dunkin' Brands growth.
Also boosting the top-line — sales from established U.S. Dunkin' Donuts locations climbed 1.7 percent, as customers bought more premium-priced, limited time offer items like turkey sausage breakfast sandwiches and dark hot chocolate. Revenue from established international locations for both chains grew as well. However, sales at U.S. Baskin-Robbins stores open 54 weeks fell more than 4 percent compared to last year's quarter, which had unseasonably warm weather.
Revenue from stores open at least a year is considered a key indicator of retailer health because it excludes results from locations that have opened or closed in the last year.
Dunkin' Brands Group Inc. earned $23.8 million, or 22 cents per share, in the three months that ended March 30. That compares with earnings of $25.9 million, or 21 cents per share, in last year's quarter when it had more shares outstanding. Dunkin' Brands said it booked a $5 million charge in the quarter from a February debt repricing, and paid out $4.1 million more in interest.
Excluding one-time charges, adjusted earnings totaled 29 cents per share.
Revenue climbed to $161.8 million from $152.4 million for the Canton, Mass., company.
Analysts expected, on average, earnings of 29 cents per share on $160.9 million in sales, according to FactSet.
Shares rose $1.36, or 3.6 percent, to $38.98 in morning trading.