Dunkin' Donuts is testing the removal of non-breakfast sandwiches as it looks to simplify its U.S. menu and attract more customers.
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The chain had introduced "bakery" sandwiches such as ham and cheese as well as turkey, cheddar and bacon in 2012 with the hope of boosting food sales after breakfast hours. But CEO Nigel Travis says people are eating breakfast sandwiches throughout the day, and that paring down slower-selling items makes operations easier for employees.
On Thursday, the company said it will expand the test of its simplified menu that began in February to 1,000 locations by October. Other items the company is removing in tests include certain varieties of bagels and muffins, Travis said.
The expansion of the simplified menu comes after customer traffic to the chain's established U.S. stores slowed during the second quarter compared to a year ago. That marked the fifth straight quarter the figure has dropped, although higher spending per visit pushed up sales by 0.8 percent. Travis noted that the chain's loyalty program and other plans could help attract more customers.
For the year, Dunkin also now expects to add between 330 and 350 additional locations, down from its previous forecast of 385 new locations. The company cited upcoming new store models and investments required for new equipment and technology for the conservative outlook. Dunkin' said it still expects to finish the year as one of the fastest growing restaurant chains in the country.
Overseas, Dunkin' sales fell 2.8 percent at established locations during the quarter. Baskin Robbins' sales dropped 0.9 percent in the U.S., and rose 3.3 percent at established locations overseas.
For the quarter ended July 1, Dunkin' Brands Group Inc. earned $55.7 million, or 60 cents per share. Earnings adjusted to exclude one-time items were 64 cents per share. That was 2 cents better than analysts expected, according to Zacks Investment Research.
The Canton, Massachusetts-based company's total revenue was $218.5 million in the period, which missed Street forecasts.
Dunkin' expects full-year earnings in the range of $2.40 to $2.43 per share.
Dunkin' shares, which rose 48 cents to $53.00 in Thursday trading, had increased slightly since the beginning of the year. The stock had climbed 14 percent in the last 12 months.
This story was generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on DNKN at https://www.zacks.com/ap/DNKN
Keywords: Dunkin' Brands, Earnings Report