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Dunkin' Brands' shares up on earnings beat as franchise fees boost results

A pedestrian passes a Dunkin' Donuts location at the Dallas/Fort Worth International Airport.
Scott Mlyn | CNBC
A pedestrian passes a Dunkin' Donuts location at the Dallas/Fort Worth International Airport.


Shares of Dunkin' Brands were up as much as 5.8 percent in premarket trading on Thursday after the company posted fourth-quarter earnings that beat analyst expectations, aided by increased franchise fees and royalty income.

Dunkin' sold off its remaining company-operated stores during the fourth quarter and is now 100 percent franchised, boosting revenue for the quarter.

The company posted earnings of 64 cents per share, excluding items, on $215.7 million in revenue. Wall Street had anticipated earnings per share of 61 cents on $215.5 million in revenue, according to Thomson Reuters.

Same-store sales for the quarter were up 1.9 percent for U.S. Dunkin' Donuts chains and down 0.9 percent for Baskin-Robbins chains during the quarter.

"This past year was one of significant achievement for Dunkin' Donuts U.S. We began executing against a six-part strategy to drive growth by positioning Dunkin' as a to-go, coffee beverages brand, and while much work remains, we made considerable progress with our plan, in particular with utilizing digital technology to drive customer loyalty and store traffic," Nigel Travis, Dunkin' Brands CEO, said in a statement Thursday.

The company expects same-store sales growth to be in the low-single digits in 2017.

In addition to digital and loyalty efforts, Dunkin launched ready-to-drink coffee beverages this week, which will be available in grocery stores and other retailers this month.