J – Dunkin' Brands Group Inc reported weaker-than-expected U.S. quarterly same-restaurant sales due in part to a cold and rainy start to the spring season, and cut its full-year adjusted profit and sales forecasts.
The company's shares fell 2 percent in light premarket trading after it also warned that full-year U.S. comparable sales growth at Dunkin' Donuts restaurants are likely to be lower than its forecast.
Dunkin' Brands, which also owns Baskin-Robbins, said it now expects U.S. comparable-store sales to grow 2-3 percent, compared to 3-4 percent it forecast earlier.
Dunkin is struggling to woo customers amid higher competition from fast-casual restaurants such as Chipotle Mexican Grill Inc and Panera Bread Co, as well as from McDonald's Corp in the breakfast category.
"Second-quarter sales growth was below our expectations with Dunkin' Donuts U.S. comparable store sales not accelerating as fast or to the degree that we anticipated," Chief Executive Nigel Travis said in a statement.
Sales at established Dunkin' Donuts franchises in the United States rose 1.8 percent in the second quarter, missing the 3.3 percent increase analysts had expected, according to research firm Consensus Metrix.
McDonald's Corp, the world's biggest hamburger chain, said on Tuesday that sales at established U.S. restaurants fell 1.5 percent in the second quarter.
Dunkin' Brands cut its full-year adjusted earnings forecast to $1.73-$1.77 per share on revenue growth of 5-7 percent. It had earlier estimated earnings of $1.79-$1.83 per share on sales growth of 6-8 percent.
The company also blamed weak performance of the Baskin-Robbins joint venture in Japan and lower-than-anticipated profit from Baskin-Robbins international business for the forecast cut.
The company's net income attributable to Dunkin' Brands rose 13 percent to $46.2 million, or 43 cents per share, in the quarter ended June 28.
Excluding items, Dunkin' Brands earned 47 cents per share, in line with the average analyst estimate, according to Thomson Reuters I/B/E/S.
Total revenue rose 4.6 percent to $190.9 million, below the average estimate of $198.5 million.
Shares of the Canton, Massachusetts-based company were down 1.6 percent at $43.25 in premarket trade on Thursday. (Reporting by Lisa Baertlein in Los Angeles and Shailaja Sharma in Bangalore; Editing by Savio D'Souza and Sriraj Kalluvila)