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Dunkin' Brands reports revenue below estimates

Stocks to Watch: October 20, 2016

Dunkin Brands, posted lower-than-expected quarterly revenue on Thursday, hurt by fewer restaurant openings and a drop in sales at established Baskin-Robbins outlets in the United States.

U.S. restaurants are battling intense competition from upstart chains and meal-kit sellers, and getting battered by lower grocery prices, which are encouraging customers to cook more at home.

Dunkin' cut its revenue growth forecast for 2016 to about 2 percent, from 3 percent to 5 percent, citing weaker-than-expected sales at its Baskin-Robbins outlets outside the United States.

Sales at U.S. Baskin-Robbins outlets open for about 18 months fell 0.9 percent in the third quarter ended Sept. 24. Analysts on average had expected a 0.5 percent rise, according to Consensus Metrix.

Net income attributable to Dunkin' Brands rose to $52.7 million, or 57 cents per share, in the quarter from $46.2 million, or 48 cents per share, a year earlier.

Excluding items, the company earned 60 cents per share.

Dunkin' said total sales fell 1.3 percent to $207.1 million, partly due to a decline in sales at company-operated restaurants as the company is now fully franchised.

Analysts had expected total sales of $214.4 million and earnings per share of 59 cents, according to Thomson Reuters I/B/E/S.