Why Dunkin' Brands Group Inc. Stock Dropped Today

By Steve SymingtonFool.com

What:Shares of Dunkin' Brands Group were down 11% as of 11 a.m. Thursday after the doughnut and coffee specialist issued disappointing forward guidance during its 2015 investor and analyst day.

So what:Specifically, management confirmed third-quarter U.S. same-store sales increased 1.1%, near the low end of its 2015 guidance for same-store sales growth of 1% to 3%.

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In addition, Dunkin' Brands now expects 2015 revenue to increase 6% to 8%, which should translate to earnings per share of $1.87 to $1.91. Analysts, on average, were anticipating 2015 revenue growth at the high end of that range, with earnings of $1.92 per share.

Now what: Going forward, Dunkin' management also outlined plans to close 100 underperforming U.S. Dunkin' Donuts locations by the end of fiscal 2016. At the same time, Dunkin' intends to follow Starbucks' lead by initiating tests for mobile ordering in Portland next month. If all goes well, Dunkin's mobile ordering platform will be rolled out nationwide by the end of next year.

But while these actions might well help Dunkin' turn things around, that offers little solace for shareholders as it continues to trail the competition. Given Dunkin Brand's freshly reduced guidance, and with plenty of work to do before it wins back the affections of investors, I can't blame the market for bidding shares down today.

The article Why Dunkin' Brands Group Inc. Stock Dropped Today originally appeared on Fool.com.

Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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