Increased royalties from franchisees contributes for Dunkin's revenue growth

Dunkin' Brands Group Inc, the parent company of Dunkin' Donuts (DD) and Baskin-Robbins, has reported better-than-expected quarterly revenue owing to increased royalties from franchisees and higher sales at company-operated restaurants.

According to results reported by the group for the third quarter ended September 26, 2015, net income attributable to the company fell to $46.2 million, or 48 cents per share, in the third quarter ended Sept. 26 from $54.7 million, or 52 cents per share, a year earlier. While, revenue rose 9 percent to $209.8 million, above the average analyst estimate of $204.1 million.

"Our overall financial performance in the third quarter, including the strong growth in our revenue, operating income and adjusted earnings per share, demonstrates the benefits and resiliency of our asset-light franchise business model, and the solid Dunkin' Donuts U.S. net restaurant growth shows the continued demand for the brand.  While we were disappointed with our third quarter Dunkin' Donuts U.S. comparable store sales, we remain on track to deliver our full-year targets, and we are working closely with our franchisees to regain transaction momentum through great products, exceptional guest service, and innovative marketing," says Dunkin' Brands Chairman and Chief Executive Officer Nigel Travis.

"Dunkin' Brands is a business with tremendous long-term growth potential. At our recent investor day, we provided targets for our growth expectations for the next five years which included mid-to-high single digit revenue growth, 10 percent plus adjusted operating income growth and up to 15 percent adjusted earnings per share growth," adds Paul Carbone, Chief Financial Officer, Dunkin' Brands Group, Inc.