Dunkin’ Brands Group, the owner of the Dunkin’ Donuts and Baskin-Robbins brands, on Thursday reported a better than expected quarterly profit as a favourable tax rate boosted results.
Shares were up 2.9 per cent in early trading after analysts brushed off the company’s softer than expected 2017 forecast as conservative.
Net income attributable to Dunkin’ Brands was US$56.1 million, or 61 cents per share, for the fourth quarter. The company reported a loss of $8.9m, or 10 cents per share, a year earlier.
Dunkin’ had a 64-cent quarterly profit, excluding items, which topped analysts’ average estimate of 61 cents per share, according to Reuters.
Total sales rose almost 6 per cent to $215.7m.
Sales at established US Dunkin’ Donuts outlets, which contribute about three-fourths of company revenue, rose 1.9 per cent in the fourth quarter, just missing analysts’ average estimate of 2.1 per cent, according to Consensus Metrix.
Dunkin’ forecast adjusted earnings per share (EPS) of $2.34 to $2.37 for 2017, below analysts’ average estimate of $2.41.
“The initial EPS guidance for 2017 is a bit disappointing, though we see upside potential to this initial guidance,” Maxim Group analyst Stephen Anderson wrote in a client note.
Among other things,Mr Anderson said the 2017 guidance is based on 385 new units, lower than 2016, and that the company’s new bottled coffee deal with Coca-Cola Co has the potential to boost earnings.
Dunkin’ also raised its quarterly cash dividend by 7.5 per cent to 32 cents per share, representing a 2.5 per cent dividend yield.
* Reuters
Follow The National's Business section on Twitter
