Dunkin' Brands Group reported results for the first quarter ended March 26, 2016. Dunkin' Donuts U.S. comparable store sales growth in the first quarter was driven by increased average ticket and traffic.
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Global systemwide sales growth in the first quarter was primarily attributable to global store development and Dunkin' Donuts U.S. comparable store sales growth which includes stores open 78 weeks or more.
Growth was driven by strong beverage sales, led by iced coffee and hot and iced espresso-based beverages, and breakfast sandwiches, led by the limited-time-offer GranDDe Burrito and the return of the Chicken Apple Sausage breakfast sandwich.
The in-restaurant K-Cup and packaged coffee categories had a negative 80 basis point impact on first quarter comparable store sales. We estimate that weather resulted in approximately 90 basis points of positive impact in the quarter.
Baskin-Robbins U.S. comparable store sales growth was driven by increased sales of cups and cones, beverages, desserts, sundaes, and cakes.
Comparable store sales growth was driven primarily by traffic. We estimate that weather resulted in approximately 300 basis points of positive impact in the quarter.
In the first quarter, Dunkin' Brands franchisees and licensees opened 114 net new restaurants around the globe. This included 69 net new Dunkin' Donuts U.S. locations (including the closing of 2 Speedway self-serve coffee stations), 42 net new Baskin-Robbins International locations, 14 net new Dunkin' Donuts International locations, and 11 net closures for Baskin-Robbins U.S.
Additionally, Dunkin' Donuts U.S. franchisees remodeled 90 restaurants and Baskin-Robbins U.S. franchisees remodeled 35 restaurants during the quarter.
Revenues for the first quarter increased 2.1% compared to the prior year period due primarily to increased royalty income as a result of systemwide sales growth and an increase in sales of ice cream and other products.
These increases in revenues were offset by a decrease in other revenues due primarily to a one-time upfront license fee recognized in connection with the Dunkin' K-Cup® pod licensing agreement in the first quarter of 2015.
Operating income and adjusted operating income for the first quarter increased $1.6 million, or 1.9%, and $3.6 million, or 4.2%, respectively.
Net income for the first quarter increased by $11.5 million, or 45.0%, compared to the prior year period.
Adjusted net income for the first quarter increased by $0.4 million, or 1.0%, compared to the prior year period primarily as a result of the $3.6 million increase in adjusted operating income, offset by increases in interest expense and income tax expense.
Diluted earnings per share increased by 60.0% to $0.40 for the first quarter compared to the prior year period as a result of the increase in net income, as well as a decrease in shares outstanding.
Diluted adjusted earnings per share increased by 10.0% to $0.44 for the first quarter compared to the prior year period as a result of the decrease in shares outstanding, as well as the increase in adjusted net income.
The decrease in shares outstanding from the prior year period is due primarily to the repurchase of shares, offset by the exercise of stock options. ■