Dunkin' Brands Posts Higher-than-Expected Results

Coffee and doughnut chain Dunkin' Brands Group Inc reported a stronger-than-expected rise in quarterly sales as customers bought more of its higher-priced sandwiches.

The company, which gets most of its business during breakfast hours, has started offering more coffee drinks and sandwiches to attract more customers through the day.

Dunkin' has also redesigned many of its stores as competition heats up in the restaurant industry, which has suffered in recent quarters as customers cut down on spending due to an uneven economic recovery.

McDonald's Corp warned on Monday its global sales would be flat in October and that weakness would continue in the fourth quarter.

In contrast, Dunkin' said more customers visited its stores and spent more during the third quarter ended Sept. 28.

The company, which also owns the Baskin-Robbins ice cream brand, posted a 4.2 percent rise in Dunkin' Donuts U.S. comparable store sales, higher than the 4 percent gain analysts polled by Consensus Metrix had expected.

U.S. Dunkin' Donuts shops accounted for about 72 percent of the company's third-quarter sales.

The net income rose to $40.2 million, or 37 cents per share, from $29.5 million, or 26 cents per share, a year earlier.

On an adjusted basis, the company earned 41 cents per share. Analysts on average expected a profit of 43 cents per share, according to Thomson Reuters I/B/E/S.

Total revenue rose 8.5 percent to $186.3 million, above market estimates of $183.2 million.

The company said adjusted earnings for 2013 would be at the low end of its forecast of $1.50-$1.53 per share because of the impact of write-downs related to a joint-venture in Spain.

Dunkin' shares closed at $47.95 on the Nasdaq on Wednesday. They have risen about 45 percent this year.

Rival Starbucks Corp, the world's biggest coffee chain, is scheduled to report results next week.