NEW YORK (Dow Jones)–Dunkin’ Brands Group Inc. (DNKN) is pushing Westward in the U.S. and ramping up international development, as it rides on strong sales growth at Dunkin’ Donuts and Baskin-Robbins in the fourth quarter.
Dunkin’ Brands, which became a publicly traded company in July, swung to a fourth-quarter profit from a year-earlier period that included heavier charges. Dunkin’s shares closed at $29.01 Wednesday, a roughly 4% rise from its closing price on its first day of trading. Shares were down 2.5% at $28.27 in recent trading Thursday.
Over the next 20 years, the company is hoping to double its Dunkin’ Donuts restaurants in the U.S. to 15,000 locations, focusing on new markets, including much of the Western part of the country.
“We believe that we are one of the few [quick-service restaurants] to have this white-space opportunity, and that’s a major point of distinction between us and our competition,” Chief Executive Nigel Travis said on a conference call with analysts.
Dunkin’ said it will open 260 to 280 net new Dunkin’ Donuts restaurants in the U.S. this year. Meanwhile, it will close 60 and 80 Baskin-Robbins locations, focusing on the ice cream chain’s international business instead, which it expects will make up the majority of the 350 to 450 net new international Dunkin’ Donuts and Baskin-Robbins stores set to open this year.
In the fourth quarter, U.S. same-store sales, which includes stores open at least 54 weeks, rose 7.4% at Dunkin’ Donuts shops and increased 5.8% at Baskin-Robbins shops, the highest quarterly same-store sales since 2001. Internationally, Dunkin’ Donuts’ performance was “disappointing,” Travis said, while Baskin-Robbins is going strong.
In the U.S., Dunkin’ Donuts’ new menu items like grilled cheese and turkey, bacon and cheddar sandwiches, are helping expand its afternoon and evening business. Its partnership with Green Mountain Coffee Roasters Inc. (GMCR), selling Dunkin’ Donuts K-cup single-serve coffee pods for Keurig brewers, contributed nearly 30% of its total same-store sales for the quarter. But Travis contends that “K-cups are not cannibalizing our installed brewed coffee or packaged coffee sales.”
Read More: Wall Street Journal