×

Decline in K-cups drove comps lower: Dunkin' CEO

Is America still running on Dunkin'? Dunkin' Brands Group, Inc. reported earnings on Thursday. While it beat the bottom line, the coffee seller's revenue were in line with estimates, according to analysts at Zacks, the investment research firm.

While the sister chain Baskin-Robbins has been performing well in the past few quarters, Zacks considers that comparable same-store sales declined at the doughnut seller due to increased competition in the breakfast sector.

"Comps are very important to us," Nigel Travis, Dunkin' Brands CEO, told CNBC's "Closing Bell." "It was principally by the fact that we were on a long-term decline in K-cups sales."

Meanwhile, McDonald's, the fast-food restaurant company, recently introduced all-day breakfast, which many consider to have created competition for Dunkin'.

In an effort to raise market shares, the CEO stated that the company has developed a five-point plan.

"It's focused on coffee, innovation, value in small pricing, digital and improving the store experience," he said.

"It's a way of driving customers into our stores through value but at the same time giving them the opportunity to take premium products," he said, adding that he feels confident in the plan and analysts do, too.

Zacks currently holds a buy rating on the group. McDonald's stock is up 28 percent in the last year, while the Dunkin' Group stock is down about 8 percent in the past 52 weeks. Dunkin' stock was up about 5 percent Thursday after it reported earnings.

"We analyze what McDonald's all-day breakfast did to our business; it was a very small amount," Travis said.

The CEO said that the company's analysis revealed that burger chains are losing store count, which was a surprise.

"If I put the top three chains together, they lost 165 stores last year, so they need to focus on comps," he said. "We are not going out of market, we have always been known for both value and quality products."