About two-fifths of Dunkin’ Brands Group, Inc.’s (DNKN) restaurants are Baskin-Robbins. The ice-cream stores are spread across the U.S. and international markets. Together, the domestic and international segments contributed 11% of the company’s total revenues. Let’s look at the same-store sales performance of both U.S. and international markets.
Baskin-Robbins U.S. same-store sales grew 5.8% from 3.2% year-over-year. This was primarily driven by the company’s Plus Up promotion and by online cake sales. The Plus Up promotion gives customers a free waffle cone when they purchase a second scoop. According to the company, the promotion in particular drove franchise profitability in 3Q14.
Baskin-Robbins International same-store sales dropped to -1.5% compared to 0.7% year-over-year. Sales in this period were affected by an inventory adjustment made by one of Baskin-Robbins’ international licensees.
We know that traffic and ticket are both important drivers of same-store sales. When a company sees a decline in traffic, it may see an increase in ticket (average check) per transaction if it strategically prices combos, and vice versa. According to the company’s management, Baskin-Robbins International had balanced transaction and ticket growth during the quarter.
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To improve same-store sales, the company launched new products such as Dark Roast coffee and breakfast sandwiches. We’ll look at these in more details in the next part of this series.