Dunkin' net income falls in third quarter
Nov. 1, 2011
by Josh Sosland
CANTON, MASS. — Net income of Dunkin’ Brands Group, Inc. in the three months ended Sept. 24 was $7,412,000, down 61% from $18,842,000 in the third quarter of 2010. Total revenues were $163,508,000, up 9% from $149,531,000.
During the quarter, Dunkin’ sustained a loss of $18,050,000 for debt extinguishment and refining transactions.
Profits were solidly higher for Dunkin’s domestic donuts segment while slipping in Baskin Robbins U.S. Changes were modest for the international business segments.
Dunkin’ Donuts U.S., the company’s largest segment by a wide margin, had operating profit of $89 million, up 23% from $72.3 million in the third quarter of 2010. Revenues were $113.9 million, up 13%.
Baskin Robbins U.S. operating profit was $7 million, down 21% from $8.8 million in the third quarter last year. Revenues were $12 million, down 2.5%.
Dunkin’ Donuts International operating profit was $2.5 million, down 33% from $3.7 million. Revenues were $3.7 million, up 3.3%.
Baskin’ Robbins International third-quarter segment profit was $14.5 million, up 3.8% from $13.9 million in 2010. Revenues were $28.1 million, up 11%.
Overall operating earnings at Dunkin’ in the quarter were $54.1 million, nearly unchanged from $54.6 million in the same period last year. Adjusted operating income, though, was $75.9 million, up 21%.
The adjustments were for amortization of intangible assets, impairment charges and Sponsor management agreement termination fee.
“As a result of our successful product innovation, powerful marketing and an intense focus on guest satisfaction and operational execution, we delivered robust third-quarter results,” said Nigel Travis, chief executive officer. “Our strong increases in system-wide sales and consolidated U.S. comparable store sales, which included positive growth for both Dunkin’ Donuts and Baskin-Robbins, reflect the strength of our overall business and underscore the opportunity we have to accelerate our profitable growth in the U.S. and around the world.”
System-wide sales growth in the quarter was 8.9%, 5.6% for U.S. comparable sales growth.
During the quarter, Dunkin’ brands’ franchisees and licensees opened 98 net new Dunkin’ Donuts and Baskin-Robbins locations globally. The company expects franchisees to open more than 600 net new restaurants for the year (versus 332 year to date).
In the nine months ended Sept. 24, Dunkin’ net income was $22,851,000, down 46% from $42,117,000. Revenues were $459,693,000, up 11%.