Dunkin' Forecasts Slower Sales Growth, to Shut 100 Stores
Dunkin' Brands comparable sales growth slowed at its U.S. Dunkin' Donuts restaurants in the third quarter and the company said 100 U.S outlets would be closed.
The company also maintained the full-year profit and revenue forecasts it had issued in April, helping send its shares down as much as 12.7 percent, their biggest intraday percentage decline ever.
Dunkin' on Thursday said comparable sales at its U.S. Dunkin' Donuts outlets rose 1.1 percent in the quarter ended September, compared with a 2 percent rise a year earlier.
The restaurants are being closed in 2015 and 2016 as convenience store chain Speedway plans to exit about 100 locations with Dunkin' Donuts franchise outlets, Dunkin' said.
Speedway will continue to remain a franchisee of Dunkin' Brands.
Nearly all of the roughly 8,200 Dunkin' Donuts restaurants in the United States are owned and operated by franchisees.
Dunkin' said the restaurants being closed accounted for 0.1 percent of its U.S. sales. The company gets about three-quarters of its revenue from Dunkin' Donuts U.S. outlets.
The company still expects full-year adjusted earnings of $1.87 to $1.91 a share and revenue growth of 6-8 percent, it said in a presentation on its investor day.
Analysts on average are expecting earnings of $1.92 a share and revenue to grow 7.3 percent, according to Thomson Reuters I/B/E/S.
Dunkin' (DNKN) shares were down about 10 percent at $44 in afternoon trading, recouping some losses after hitting a near nine-month low of $42.75.