Same-store sales at Dunkin’ were up 2.4% in the first quarter of the year as it plays the “early innings” of a three-year growth strategy outlined last year, parent company Dunkin’ Brands Inc. said Wednesday.
In an interview after the earnings call, CEO David Hoffmann told NRN that the increase, which was the largest quarterly same-store sales gain in four years, was the result of technology advancements, “better for you” menu items and premium drinks, including its espresso rollout.
Sister brand Baskin-Robbins brand did not fare as well in the quarter, with same-store sales down 2.8%, and Hoffmann said the company plans to apply learnings from Dunkin’ initiatives to boost Baskin-Robbins’ performance.
Dunkin’ Brands Inc. reported net income for the quarter ended March 30 of $52.3 million, or 63 per share, up 4.3% from $50.2 million, or 57 per share, in the same period a year ago. Revenues were up 5.9% to $319.1 million, from $301.3 in the year-earlier period.
On the technology front, Dunkin’ recently brought its mobile app in-house making the product “more nimble and flexible,” said Hoffmann. The app now has one-click enrollment and fewer steps for order placement. The company also recently announced a change in the way consumers can pay through the app. Rather than having to use a gift card, as they did previously for app purchases, customers can now use all tender including cash.
Mobile app usage is particularly crucial to reaching espresso drinkers who skew younger, said Hoffmann. But just as the mobile app is meant to appeal to a wide variety of users, Hoffmann sees Dunkin’s espresso drinks appealing to the masses as well.
“We’re a brand of a size that we can democratize espresso for all of America,” he said.
Dunkin’ has been focused on beverages for a while now, and although it has trimmed its menu, the current offerings still have wide appeal, said Hoffmann. The success of the Power Breakfast Sandwich “surprised us, it dramatically outperformed the test,” he said.
“We always had a desire to go after a better-for-you platform,” he added. “We saw a category of consumers that were looking for healthy options on a budget.”
After observing the success of the Power Breakfast, a veggie and egg white sandwich with turkey sausage served on multigrain sandwich bread, the brand released a high-protein egg-white bowl last month. Plant-based proteins are in the pipeline going forward, added Hoffmann.
The brand isn’t ignoring doughnuts, other sweet snacks or traditional breakfast sandwiches, though.
“We are a brand that offers great choice,” said Hoffmann.
Turning to Baskin-Robbins, Hoffmann said he sees the brand following Dunkin’s strategy of “relevance and modernity” while creating a more upscale in-store experience.
Changes to the ice cream shops are already taking hold, but “it’s a long-term play for us.”
“There’s still a place for parlors to exist in American culture.”
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