Dunkin' Brands: U.S. Units Will Double in 20 Years

Quick-service operator back to profitability in 4Q 2011

New menu items and innovative marketing brought Dunkin’ Brands Group Inc. back to profitability in the fourth quarter of 2011, the parent of the Dunkin’ Donuts and Baskin-Robbins chains said Thursday.

The Canton, Mass.-based franchisor said it expected strong performance through 2012.

The company reported $11.6 million in profit for the three months ended December 31, compared with a loss of $15.3 million in the fourth quarter of 2010.

“We had an incredibly strong finish to the year,” chief executive Nigel Travis said.

The “key ingredients,” he said, of its performance — innovative products and marketing — are in place to help the company achieve its goal of more than doubling the number of U.S. Dunkin’ Donuts units to 15,000 within the next 20 years.

Dunkin’ Donuts’ domestic operations, totaling 7,015 locations, account for more than 70 percent of the company’s total revenue. The remainder comes from 2,457 domestic and 4,254 international Baskin-Robbins units and 3,068 international Dunkin’ Donuts restaurants.

New products, marketing lift Dunkin’

New products helped bring new customers to Dunkin’ Donuts, Travis said, noting that the smoked sausage breakfast sandwich introduced as a limited-time offer in the fourth quarter was one of the most successful such offers in the company’s history.

A Texas Toast grilled cheese sandwich introduced in December also helped drive traffic after 11 a.m., Travis said. Four other sandwiches have since been added, helping bring customers in after breakfast, he said.

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Both the number of customers and average check amounts increased in the fourth quarter, but Travis declined to provide further details.

In the third quarter, Dunkin’ Donuts introduced single-serving K Cups, which it marketed during the holiday season. Travis said they accounted for a little less than 30 percent of the 7.4 percent same-store sales increase Dunkin’ Donuts’ U.S. division reported for the fourth quarter. Sales of the cups were not cannibalizing sales of packaged or brewed coffee in restaurants, he said.