Dunkin' Brands' quarterly report wasn't as sweet as the donut giant expected.
The company today posted second-quarter sales that fell short of expectations due to weak same-store sales at Dunkin' Donuts in the U.S. and Baskin-Robbins' struggles abroad. It also cut its full-year forecast in a sign that more weakness is to come.
Dunkin' Brands reported a second-quarter profit of 47 cents a share, in line with analysts' estimates. Revenue for the quarter rose to $190.9 million from $182.5 million a year ago, but missed the $198.5 million analysts were expecting.
Same-store sales at U.S. Dunkin Donuts rose only 1.8 percent, compared to 4 percent in the same period last year, with the company attributing the slower growth to "macroeconomic challenges" across the retail and fast-food industries as well as a cold and rainy spring. Dunkin' Donuts American market makes up around 75 percent of the company's total revenue.
Baskin-Robbins was also to blame for the weak quarter. The chain, which has thrived internationally despite the fact that there are only a handful of stores open in the U.S., failed to reach its anticipated profit this quarter. The Baskin-Robbins joint venture in Japan didn't perform as well as expected, says Dunkin's CFO Paul Carbone, and overall ice cream profits were down for Baskin-Robbins International.
While Dunkin' Brands still expects Baskin-Robbins to achieve full-year same-store sales to grow 1 to 3 percent, it now expects same-store sales at U.S. Dunkin' Donuts to grow 2 to 3 percent for the year, down from an earlier forecast of 3 to 4 percent. The company also lowered its full-year profit and revenue targets.