The parent company of Dunkin' Donuts and Baskin-Robbins cake and ice cream restaurants, Dunkin' Brands (DNKN), posted its first-quarter 2020 results this morning, exceeding analyst forecasts in several metrics. Additionally, its board of directors has temporarily suspended dividend payments to help retain liquidity moving into the year's second quarter.
Despite a heavy blow delivered to sales in March by the COVID-19 coronavirus pandemic, Dunkin' managed to beat consensus analyst estimates as reported by Zacks Equity Research. The company's diluted adjusted earnings per share (EPS) came in at $0.67, unchanged year over year but beating the $0.62 estimate. Its $323.1 million in revenue, up 1.3% from last year, outdid analyst consensus by $22.61 million, or approximately 7.5%.
Dunkin's report shows sales were on track for much of the quarter for solid year-over-year positive gains, until the restaurant industry ran into the stumbling block of COVID-19. During the quarter's first 10 weeks, comparable store sales grew by 3.5% for Dunkin' outlets and a scorching 11% for Baskin-Robbins.
Over the course of the last three weeks, those figures turned to a plunge of negative 19.4% and negative 23.3% respectively, leading to net comparable sales losses of negative 2% for Dunkin' and net growth of just 1.8% for Baskin-Robbins. CEO Dave Hoffmann said that prior to the crisis, the company's performance "was on track to have its highest quarterly comps in more than six years and positive traffic."
The board of directors opted to temporarily halt both dividend payments and its share repurchase program, preserving roughly $33 million. CFO Kate Jaspon characterized the move as "the prudent and responsible thing to do in this time of unprecedented uncertainty."