Popular coffee and donut shop, Dunkin Brands, released first quarter results this morning. Dunkin Brands Group Inc (NASDAQ:DNKN) was forecasted by analysts to post earnings per share of $0.35 on revenue of $180.65 million. Actual results came in at earnings per share of $0.40 on revenue of $185.9 million, beating both earnings per share and revenue estimates. Dunkin’ Donuts parent company, Dunkin Brands Group Inc is up 8.50% in premarket trading.
US same store sales rise 2.7%, 8% for Baskin-Robbins
Dunkin Brands saw US comparable store sales rise 2.7% during the first quarter, while ice cream store, Baskin-Robbins, saw US comparable store sales rise 8%. The parent company, Dunkin Brands Group owns Baskin-Robbins locations across the US, as well. What makes this earnings beat so impressive is the fact that Dunkin’ Donuts is primarily an East Coast brand and considering the terrible weather the East Coast has seen during the first quarter, Dunkin’ Donuts really was able to draw customers in despite weather conditions. “This was a really strong quarter and we are delighted with the performance of our product and marketing programs given the severe weather that we experienced in many of the markets where our restaurants are located,” Dunkin CEO Nigel Travis said in the earnings release.
Dunkin Brands raises full year growth and earnings outlook
Earlier this year, Dunkin Brands was forecast to bring in 5% to 7% growth this year, with earnings per share coming in somewhere between $1.83-$1.87 per share. However, management now expects Dunkin’ Donuts outlook to show 6% to 8% growth this year and full year earnings per share is now estimated to come between $1.87-$1.91 per share. Aside from great same store sales and getting people to come in to the shop despite weather conditions, Dunkin’ Donuts can attribute part of its success with its strategic partnerships as well. Dunkin’ Donuts has partnership with Keurig Green Mountain to manufacturer Dunkin’ Donuts coffee K-cups. Additionally, Dunkin’ has an agreement with J.M. Smuckers Company.
Overall, Dunkin Brands absolutely surprised analysts and investors with this bullish earnings release. Poor weather was certainly expected to significantly impact results, but management must have found the right advertising and marketing ingredients. Dunkin is up 19% year to date and we could see further gains ahead if Dunkin can continue to drive customers into stores.