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Dunkin’ Brands Beats Top-Line and Bottom-Line Estimates in Q1

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May. 2 2019, Published 10:15 a.m. ET

First-quarter performance

Dunkin’ Brands (DNKN) reported its first-quarter results today. For the quarter ended on March 30, the company posted adjusted EPS of $0.67 on revenues of $319.1 million, outperforming analysts’ EPS estimate of $0.62 and revenue estimate of $312.4 million.

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Year-over-year revenue growth

Year-over-year, Dunkin’ Brands’ revenue grew 5.9% from $301.3 million in the first quarter of 2018. The revenue growth was driven by increased royalty and advertising fees due to positive SSSG and the net addition of points of distribution (or POD). The adoption of the new accounting standard increased the company’s rental income, which also contributed to the company’s revenue growth.

During the quarter, Dunkin’ US posted SSSG of 2.4%, while Dunkin’ International posted SSSG of 2.9%. The SSSG of Baskin-Robbins US declined 2.8%, while Baskin-Robbins International posted a fall in its SSSG of 2.0%. In the last four quarters, Dunkin’s POD has increased by 302 units, while the Baskin-Robbins’ POD has increased by 27 units.

EPS growth

For the quarter, Dunkin’ Brands has posted EPS of $0.63. However, removing unusual items, the company’s adjusted EPS stood at $0.67, which represents growth of 8.1% from $0.62 in the corresponding quarter of 2018. The increase in revenue, expansion of adjusted operating margins, and a lower weighted average number of common shares drove the company’s EPS during the quarter.

Dunkin’ Brands’ adjusted operating margin expanded from 31.8% in the first quarter of 2018 to 33.3%. Due to share repurchases in the last four quarters, the weighted average number of common shares for the quarter declined by ~4.4 million.

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