Canton, Mass. – Dunkin’ Brands Group Inc., parent company of Dunkin’ Donuts and Baskin Robbins, reported an impressive set of year-over-year financial results for the fourth quarter and fiscal year 2013. During the quarter, net income grew 23% to $42.1 million from $34.2 million, and revenue increased 13% from $161.7 million to $183.2 million.
U.S. same-store sales for the quarter increased 3.5% at Dunkin’ Donuts and 2.2% at Baskin Robbins.
During the full fiscal year, net income rose 36% to $146.9 million from $108.3 million and revenues increased 8% to $713.8 million from $658.2 million. U.S. same-store sales rose 3.4% at Dunkin’ Donuts and 0.8% at Baskin Robbins.
According to Dunkin’ Brands, Dunkin' Donuts U.S. same-store sales growth in the fourth quarter was driven by increased average ticket and higher traffic resulting from its focus on operational excellence and product and marketing innovation, while Baskin Robbins same-store sales growth was driven by a focus on returning and new holiday flavors, new cake designs and take-home ice cream quarts. Fourth quarter revenues resulted primarily from increased royalty income due to systemwide sales growth, increased franchise fees due to favorable development mix and incremental franchise renewals, and increased sales of ice cream products. Quarterly net income primarily grew as a result of a $14.5 million increase in operating income and a $2.0 million decrease in interest expense. This was offset by a $7.6 million increase in income tax expense and greater losses on foreign currency due to exchange rate fluctuations.
"We are steadfastly committed to driving profitable growth for both our franchisees and our shareholders, a commitment we delivered on yet again in our second full year as a public company," said Paul Carbone, CFO, Dunkin' Brands Group Inc. "As a result of strong topline sales growth and our intense focus on restaurant-level returns, franchisee profitability for both brands is healthier than it's ever been. Additionally, our nearly 100% franchised, asset-light business model enabled us to return more than $100 million to shareholders in 2013 through our quarterly dividends and ongoing share repurchases. We're also excited to announce the board of directors' decision to increase our first quarter dividend more than 20% over our fourth quarter 2013 dividend."
Looking ahead, Dunkin’ Brands expects the following results for fiscal year 2014:
- Dunkin' Donuts U.S. same-store sales growth of 3 to 4% and Baskin-Robbins U.S. same-store sales growth of 1% to 3%.
- Between 380 and 410 net new U.S, Dunkin’ Donuts restaurants representing greater than 5% net restaurant growth, five to 10 net new Baskin-Robbins U.S. restaurants.
- Internationally, the company is targeting opening 300 to 400 net new restaurants across the two brands, inclusive of the anticipated closing of approximately 100 small, kiosk locations in the Philippines throughout the year. The closure of these locations is immaterial to Dunkin' Donuts International business segment profit.
- Globally, the company expects to open between 685 and 800 net new units.
- Revenue growth of between 6% and 8%.