Investors Punish Dunkin' Brands as EPS Misses Estimates


Source: Dunkin' Brands.

Investors pushed shares of Dunkin' Brands Group lower by as much as 4% on Thursday, after the quick-service chain reported mixed results for its fiscal 2013 third quarter. For the period ended Sept. 28, Dunkin' Brands' adjusted earnings per share increased 10.8% to $0.41, up from $0.37 in the year-ago period. Analysts were looking for earnings of $0.43 per share.

Revenue increased 8.5% to $186.3 million in the quarter because of increased franchise fees and royalty income from franchises. The company also noted increased sales of ice cream products.

As of its fiscal 2013 third quarter, franchisees owned nearly 100% of the company's 17,900 Dunkin' Donuts and Baskin-Robbins locations worldwide. This creates a steady revenue stream for the company and enables Dunkin' Brands to reward shareholders with a reliable dividend and share buybacks. The company announced a fourth-quarter cash dividend of $0.19 per share, which yields about 1.6% on yesterday's closing price.

Looking ahead, the company says its full-year adjusted EPS will likely be at the low end of its target range of $1.50 to $1.53, because of writedowns in its Dunkin' Donuts joint venture in Spain. Shares of Dunkin' Brands are up more than 46% year-to-date.


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