Dunkin’ Brands beat estimates for profit and sales on Thursday, selling more breakfast sandwiches and beverages in the third quarter as it prepares to rebrand its flagship chain to underscore its focus on coffee.
Shares of the company fell 3 percent in premarket trading following the report.
Comparable sales at established Dunkin’ outlets in the United States rose 1.3 percent, but missed the average analyst estimate due to a fall in traffic. Analysts on average had expected a 1.5 percent rise, according to Refinitiv data.
To pull in more traffic, the coffee and donuts company is changing its main brand from Dunkin’ Donuts to Dunkin’ in a sweeping rebranding that will also revamp its drinks menu to introduce more high-quality espresso drinks at lower prices as it bids to compete with bigger rival Starbucks.
The company is also pouring more money into digital initiatives such as fulfilling app orders through a dedicated drive-through lane and remodeling stores that are more suited to mobile ordering and payments.
Net income in the third quarter ended Sept. 29 rose to $66.07 million, or 79 cents per share, from $41.2 million, or 45 cents per share, a year earlier.
Excluding items, the company earned 83 cents per share.
Net sales rose 6 percent to $350.01 million.
Analysts on average had expected earnings of 73 cents per share on revenue of $342.9 million, according to Refinitiv estimates.