Dunkin Brands delivered Q3 earnings Thursday that pleased Wall Street with earnings beating consensus analyst estimate by $.08 while revenues missed expectations by $2.0 million. The beat in earnings was primarily due to lower tax rates. Dunkin raised guidance for the year due to the tax savings and Wall Street approved. US same store sales were up 1.5%, versus estimates of 1.6%, continuing the trend of very modest– actually too modest to cover store cost inflation– same store sales growth that has been present for several years. Ticket was up but transactions were down. During the call, several issues were addressed that were also noted this week during the 2019 DDIFO National Convention in panel discussions. These included:

  • Additional Dunkin Brand cash contributions to remodel effort: Dave Hoffmann noted they were happy with the prior $100M effort and would leave all options on the table in 2020.
  • Wendy’s breakfast: Brand will be wary but not worried.
  • Sales lift from Next Gen: Happy overall but can’t release numbers yet.
  • Beyond Sausage product test: steady hit rates in Manhattan test.
  • Kate Jaspon reiterated low end of new store open range. This somewhat surprises some analysts who don’t appreciate the remodel planning underway.
  • Via a question, the Brand confirmed it was working to remove “handcuffs” (their wording) on digital/mobile pay/DD Perks program.
  • On Espresso, the Brand noted sales mix was now 10% of sales.
  • US CMO Search: Dave Hoffmann noted that the search was well underway and offered that Tony Weisman had a great 2 year run and stepped away.