CANTON, Mass. – Dunkin Brands Group Inc. reported earnings of $350.9 million in 2017, a 79.4 percent increase year over year that was primarily driven by a $143.4 million net tax benefit from the enactment of the Tax Cuts and Jobs Act, the company reported this week.
The tax changes affected the company’s measurement of tax liabilities.
Revenue for the 2017 fiscal year totaled $860.5 million, a 3.8 percent increase year over year.
Earning per diluted share for the year were $3.80 as compared with $2.11 one year prior.
The company also announced that it plans to open approximately 1,000 new Dunkin’ Donuts stores by 2020, with 90 percent of new openings occurring outside of the Northeast.
The company expects 75 percent of new stores moving forward will feature a drive-thru lane.
Nigel Travis, CEO of Dunkin Brands said in a statement, “We … realize that if we are to compete even more effectively within the coffee and breakfast segment, we must make further progress against the execution of our multi-year Blueprint for Growth plan, which is designed to transform Dunkin’ Donuts U.S. into the most-loved beverage-led on-the-go brand.”
The company said it is still focusing on its morning sales (before 11. a.m.) but is also pushing the expansion of afternoon sales.
It also said the company will continue its menu focus on cold brew coffee, iced coffee and frozen Dunkin coffee, new breakfast sandwiches, seasonal doughnut offerings and highlighted its commitment to eliminate synthetic dyes from all of its products by the end of 2018.
In the fourth quarter of 2017, Dunkin’ Brands reported a $195.5 million profit, compared with $56.1 million one year prior, again, driven by a $143.4 million net tax benefit from the tax code changes made in 2017.
Revenue for the quarter was $227.1 million, compared with $215.7 million in the fourth quarter of 2016. Earnings per diluted share for the quarter were $2.13, compared with $0.61 one year before.
The Dunkin’ Donuts U.S. segment reported a $141.2 million profit in the fourth quarter, an increase of 7.8 percent year over year. Revenue for the segment increased 9 percent year over year to $177.7 million. The increase was attributed to increased franchise fees driven by additional renewal income, offset by a decrease in gross openings.
The Dunkin’ Donuts International segment reported a profit of $2.2 million in the fourth quarter 2017, compared with a $3.2 million profit in the same 2016 period. Revenue declined 6 percent to $5.6 million over the year. The company said the decline was driven by a decrease in franchise fees.
The Baskin-Robbins U.S. segment reported a $5.4 million profit in the fourth quarter, a 6.3 percent increase year over year, while quarterly segment revenue increased 11.9 percent year over year to $10.6 million. The company attributed the rise to an increase in ice cream sales and franchise fees.
The Baskin-Robbins International segment reported fourth-quarter profit of $7.4 million, a 10.9 percent decrease year over year. Revenue declined 12.3 percent year over year to $25.8 million in the fourth quarter of 2017. The company said this was due to decreases in sales of ice cream to its licensees in the Middle East.
Chris Bergenheim is the PBN web editor.