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Here comes the Dunkin 'power muffin' to help solve one key problem

Brian Sozzi

The “power muffin” to the rescue for Dunkin Brands.

Dunkin’ Brands (DNKN) CEO David Hoffmann tells Yahoo Finance the restaurant chain will soon launch a protein-infused muffin, part of a broader push into snacking items this year. Small gesture to snacking fans, but it could be an important one for Dunkin.

The goal of adding more grab-and-go snacks at Dunkin is to try and stem traffic declines at the company. It’s a factor that has held sales back for some time at Dunkin mostly because it’s not a main player in the lunch and dinner hours when it comes to food.

“We think there are more things we could get into. We dipped our toe into snacking about a year ago and we think there is an opportunity,” Hoffmann said. “We just need to establish ourselves in the afternoon – that is an underserved daypart for us. We did with our espresso deals from 2 pm to 6 pm. Now we are looking to pair it with things. People don’t want breakfast for lunch or in the afternoon, so we are looking at how do we pair snacking items with coffee. You will start seeing us make some advances around that throughout the year. It gets us into that second daypart.”

Hoffmann added he isn’t concerned about Dunkin’s fourth quarter U.S. traffic decline, noting it was Dunkin’s best quarter for traffic in five years. He also didn’t rule out more products in partnership with plant-based food king Beyond Meat following a successful breakfast sandwich launch nationwide last year.

Ultimately, investors shouldn’t expect snacks at Dunkin’ to completely reverse traffic pressure — that would likely only come amid a serious entry into standard fast-food lunch or dinner fare. Dunkin’ moved away from most of those foods several years ago as part of a menu redesign that emphasized coffee beverages.

Even without loads of snacks in the restaurants, Dunkin’ managed to serve up a solid fourth quarter on Thursday.

By the numbers:

  • 4Q Net sales: $335.9 million vs. $336 million estimate

  • 4Q Diluted EPS: $0.73 vs. $0.70 estimate

  • Dunkin’ U.S. same-store sales: +2.8% vs. +2.4% estimate

  • Baskin Robbin U.S. same-store sales: +4.1% vs. +2% estimate

  • Dunkin’ international same-store sales: +6.9% vs. +3.9% estimate

  • Baskin Robbin international same-store sales: +3.2% vs. +2.4% estimate

  • 2020 EPS outlook: $3.16 to $3.21 a share vs. $3.29 estimate

  • Highlights: Dividend raised by 7.3%; New $250 million stock buyback announced

Shares fell about 2% in afternoon trading, however, likely amid the worse than expected profit outlook for 2020. The company will reportedly close half of 71 stores in China as a result of the coronavirus outbreak. But given the small footprint, it’s unlikely to materially hurt Dunkin’s profits this year.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Watch The First Trade each day here at 9:00 a.m. ET or on Verizon FIOS channel 604. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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