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New Dunkin’ CEO says beverage-and-convenience strategy is paying off

New Dunkin’ CEO says beverage-and-convenience strategy is paying off

Chain doubles down on digital focus with new mobile wallet partnership

In his first earnings call as CEO of Dunkin’ Brands Group Inc., David Hoffmann said Dunkin’ Donuts remains committed to its beverage- and convenience-focused strategy, calling a 1.4 percent increase in domestic same-store sales in the second quarter an “early sign” the efforts are paying off.

“Our highest quarterly beverages sales on record underscored that we're on track towards our goal to be the nation's leading beverage-led, on-the-go brand,” Hoffmann said.

“This progress is the direct result of our relentless focus on executing the Blueprint and delivering on our consumer promise of quality food and beverages compelling value, speed and convenience,” he added.

Hoffmann said earlier this year that the Canton, Mass.-based company’s Blueprint for Growth was “focused on five main areas that we believe will collectively grow top- and bottom-line franchisee profitability: menu innovation; unparalleled convenience driven by digital leadership; broad accessibility to our brand through restaurant growth and new channels for our branded packaged goods; restaurant excellence; and brand evolution.”

In recent months, the chain has streamlined its core menu — even as it introduced such new items as Donut Fries — and promoted a tiered value menu. It also introduced a new “NextGen” store design that features designated pickup areas for mobile orders, nitrogen-infused cold brew and tabletop outlets to power devices.

Net income for the second quarter, ended June 30, increased 18.4 percent to $60.5 million, or 72 cents per share, from $51.1 million, or 55 cents per share, a year earlier. Katherine Jaspon, Dunkin’ Brands CFO, credited the increase in net income to advertising fees and related income and royalty income as a result of systemwide sales growth.

Revenues for the quarter were $350.6 million, up 4.9 percent, from $334.2 million a year earlier.

Same-store sales at sister brand Baskin-Robbins were down 0.4 percent during the quarter.

Dunkin’ also announced a multiyear deal with mobile wallet provider CardFree Inc., an agreement designed to allow Dunkin’ to have greater control over its technology.

“I've always had a particular focus on technology … and harnessing its capabilities to drive one-to-one marketing and quick-service restaurants,” Nigel Travis, the brand’s former CEO and current executive chairman said during the call. “This deal will also support the development of future digital initiatives including, catering, delivery, and curbside pickup.”

Franchisees completed 40 remodels this quarter, including the first in the redesigned NextGen image. The company said it is on track to have 50 new or remodeled NextGen stores open by the end of the year.

Dunkin’ Brands said a net 96 net new restaurants opened globally during the quarter.

Currently, there are 12,600 Dunkin' Donuts restaurants and more than 8,000 Baskin-Robbins restaurants.

Contact Gloria Dawson at [email protected] 

Follow her on Twitter: @GloriaDawson

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