GO
Loading...

UPDATE 2-Dunkin' net income jumps, profit misses slightly; stock drops

Thursday, 24 Oct 2013 | 12:13 PM ET

(Adds comment, details of Spain write-down)

Oct 24 (Reuters) - Dunkin' Brands Group Inc reported a jump in quarterly net income Thursday, but profit slightly missed analyst expectations and the company said 2013 earnings would take a hit from a writedown relating to its business in Spain.

Shares of the fast-growing parent firm of coffee and sandwich chain Dunkin' Donuts and Baskin-Robbins ice cream shops were down 3 percent at $46.56 in midday trading on the Nasdaq.

The stock recently hit an all-time high of $49.13 as its core U.S. Dunkin' Donuts business outperformed rivals.

Third-quarter net income jumped 36 percent to $40.2 million, or 37 cents per share, from a year earlier.

On an adjusted basis, the company earned 41 cents a share. Analysts on average expected a profit of 43 cents per share, according to Thomson Reuters I/B/E/S.

Total revenue grew 8.5 percent to $186.3 million, above market estimates of $183.2 million.

Dunkin' said adjusted earnings for 2013 would be at the low end of its forecast of $1.50 to $1.53 per share due to a write-down from its joint venture in Spain, which trimmed earnings by 3 cents per share in the third quarter.

Sales at established U.S. Dunkin' Donuts shops - which made up nearly three-quarters of overall sales - grew 4.2 percent, slightly more than the 4 percent gain that analysts polled by Consensus Metrix had expected.

The company said it saw an increase in the number of visits, and amount spent, by domestic Dunkin' Donuts customers.

Chief Executive Nigel Travis said the U.S. government shutdown earlier in the month had no impact on sales.

McDonald's Corp, Dunkin's top rival in the United States, warned on Monday its global sales would be flat in October and that weakness would continue in the fourth quarter.

Another rival, Starbucks Corp, the world's biggest coffee chain, is scheduled to report results next week.

(Reporting by Lisa Baertlein in Los Angeles, Maria Ajit Thomas and Aditi Shrivastava in Bangalore; Editing by Bernadette Baum)