October 22, 2015 / 10:20 AM / 2 years ago

Higher royalties, ice cream sales help Dunkin' beat estimates

(Reuters) - Dunkin’ Brands Group Inc (DNKN.O) reported better-than-expected quarterly revenue and profit, helped by a rise in royalties from franchisees and higher sales at Baskin-Robbins ice cream shops.

The signage is pictured at a newly opened Dunkin' Donuts store in Santa Monica, California September 2, 2014. REUTERS/Mario Anzuoni

Baskin-Robbins partly helped the company offset lackluster performance at its U.S. donut stores, which account for nearly three quarters of its total revenue.

Strong sales of ice creams and beverages, and higher online orders for cakes helped Baskin-Robbins post a 7.5 percent rise in U.S. comparable store sales in the quarter ended Sept. 26.

The company also boosted its expectations for the ice cream chain’s U.S. same-store sales to 3-5 percent for the year from its previous forecast of 1-3 percent.

However, Chief Executive Nigel Travis said a 1.1 percent growth in U.S. same-store sales at Dunkin’ Donuts was disappointing.

Higher minimum wages and removal of some popular breakfast items from the menu due to bird flu-induced egg shortage hurt same-store sales at donut shops, Travis said at an investor meeting this month.

Royalties and fees from franchisees rose 5.6 percent to $133.9 million, accounting for nearly two-thirds of the company’s total revenue.

Net income attributable to the company fell 15.5 percent to $46.2 million, or 48 cents per share, in the third quarter.

Excluding items, the company earned 52 cents per share.

Revenue rose 9 percent to $209.8 million.

Analysts on average had expected earnings of 51 cents per share on revenue of $204.1 million, according to Thomson Reuters I/B/E/S.

Dunkin’ shares were unchanged on Thursday in premarket trading. They hit a 15-month low of $40.66 on Wednesday.

Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Anil D'Silva

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