Dunkin' Brands said Thursday second-quarter revenue fell 20% as fewer customers stopped by its stores on the way to work due to the coronavirus pandemic. However, customers, often stopping in with their families, are spending more per visit when they do arrive.
The company also said it expects to close around 800 U.S. locations this year as it has been evaluating its most productive cafes.
Dunkin' shares were down nearly 5% in trading Thursday.
"For Dunkin' U.S., same-store sales improved sequentially throughout the quarter, largely as a result of our ability to pivot quickly and introduce new menu items designed to appeal to customers who are now visiting us later in the day," said CEO Dave Hoffmann, in a press release.
Dunkin' said it plans to halt further reopenings of its dining rooms as Covid-19 cases continue to rise in the U.S. Many franchisees have reported strong demand for its drive-thru service.
For the second quarter ended June 27, Dunkin' said net income fell to $36.5 million, or 44 cents per share, from $59.6 million, or 71 cents per share, a year ago.
Excluding non-recurring items, the company earned 49 cents per share, below Refinitiv estimates of 48 cents per share.
Revenue fell to $287.4 million from $359.3 million last year, but outpaced estimates of $277 million.
U.S. Dunkin' same-store sales dropped 18.7%, while Baskin-Robbins U.S. same-store sales fell 6.0%.
In the second quarter, the company had net closures of 229 Dunkin' and Baskin-Robbins locations worldwide. This included the closure of 180 of its ice cream shops in international markets, and 40 Dunkin' stores in the U.S. on a net basis. Ten of the Dunkin' sites were within Speedway locations.
The company expects 800 Dunkin' locations will close in 2020, on a net basis, including the closure of 450 Speedway locations, which were previously announced. That would be about 8% of Dunkin's total U.S. fooprint, or about 2% of the coffee chain's U.S. systemwide sales in 2019.
Dunkin also reinstated its dividend.
Correction: Dunkin' had net closures of 229 Dunkin' and Baskin-Robbins stores in the second quarter. A previous version of this story said the company expected to close that many stores. The company plans to close 800 Dunkin' locations in 2020 on a net basis.