CANTON, MASS. — Dunkin’ Brands Group, Inc. on Dec. 18 provided new or updated performance expectations for 2015, several of which are below the company’s long-term earnings targets. Dunkin’ Brands cited slower sales of packaged coffee in restaurants and pressure on joint ventures in Korea and Japan as reasons for the lower expectations.
Dunkin’ Brands in 2015 expects U.S. comparable store sales growth of 1% to 3% for both Dunkin’ Donuts and Baskin-Robbins. Long-term targets are in the 2% to 4% range. Also in 2015, Dunkin’ Brands expects revenue growth of between 5% and 7%, which compares to a long-term target of between 6% and 8%, and adjusted operating income growth of between 6% and 8%, which compares to a long-term target of between 10% and 12%.
“This has been a challenging year for our businesses,” said Nigel Travis, chairman and chief executive officer of Canton-based Dunkin’ Brands Group. “We are pleased that Dunkin’ Donuts’ 2014 U.S. comparable store sales and transactions remained positive, although not as positive as we hoped because of continued pressure on the consumer and decelerating sales of packaged coffee in our restaurants. We expect these trends to continue into next year.
“Internationally we are making progress in retooling our businesses, but the joint ventures in Korea and Japan remain under pressure and are expected to negatively impact next year’s results. Given this, we are updating and providing additional performance expectations for fiscal year 2015, and while our earnings growth expectations for 2015 are below our longer term targets, we are committed to returning to double-digit growth in the subsequent years.”
In other 2015 projections, the company expects Dunkin’ Donuts U.S. will add between 410 and 440 net new restaurants and that Baskin’ Robbins U.S. will add between 5 and 10 net new restaurants. Internationally, Dunkin’ Brands in 2015 will target opening 200 to 300 net new restaurants across both its brands. Globally, Dunkin’ Brands expects to open between 615 and 750 net new units.
Dunkin’ Brands will report results for the fourth quarter and fiscal year of 2014 on Feb. 5, 2015. Mr. Travis said in 2014 Dunkin’ Brands expects adjusted earnings per share in the range of $1.75 to $1.76 and full-year Dunkin’ Donuts U.S. comparable stores sales growth to be about 1.4%.“Additionally, we expect to finish the year near the top end of our Dunkin' Donuts U.S. development growth target of 380 to 410 net new restaurants, and 2014 free cash flow growth should be greater than 15%,” he said. “We continue to believe Dunkin’ Brands has tremendous growth prospects, led by the opportunity for 17,000 plus Dunkin’ Donuts restaurants in the U.S. and over 30,000 restaurants for both brands globally.”