Dunkin' Brands Group, Inc. (NASDAQ:DNKN) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 08:00 am ET


Dunkin' Brands Group, Inc. (NASDAQ:DNKN) Q4 2018 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Dunkin' Brands Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. (Operator Instructions) And as a reminder, today's conference call is being recorded.

I'd now like to turn the conference over to Stacey Caravella, Senior Director of Investor Relations. Please go ahead.

Stacey Caravella

Thank you, operator, and good morning, everyone. Speaking on today's call will be Dunkin' Brands' Chief Executive Officer, Dave Hoffmann; and Dunkin' Brands' Chief Financial Officer, Kate Jaspon. Today's call is being webcast live and recorded for replay.

Before I turn the call over to Dave, I'd like to remind everyone that the language on forward-looking statements included in our earnings release also applies to our comments made during the call. Our release can be found on our website, investor.dunkinbrands.com, along with any reconciliation of non-GAAP financial measures mentioned on the call with their corresponding GAAP measures.

Lastly, we're providing tentative dates for the release of our quarterly earnings results in 2019. We will release Q1 earnings results on May 2, Q2 on August 1, and Q3 on October 31.

Now, I'll turn the call over to Dave.

David Hoffmann

Thanks, Stacey, and good morning, everyone.

2018 was a foundational year for both Dunkin' and Baskin-Robbins. Together with our franchisee and licensee partners, we achieved many significant milestones that will unlock healthy growth and modernize our brands for the next generation of consumers. While our journey towards transformation is all about deliberate sequencing of key initiatives, we had an incredibly productive 2018, and I remain confident in our ability to deliver long-term growth.

Progress last year included a comprehensive menu simplification effort for Dunkin', transformational next-generation restaurant designs for both brands globally, investing alongside our franchisees at an unprecedented level into the Dunkin' U.S. business, securing our digital future through our CardFree acquisition, our first foray into national value with the launch of the Dunkin' Go2s platform, hiring new creative agencies and unveiling our new Dunkin' brand identity, an entirely new handcrafted espresso experience in more than 9,000 Dunkin' U.S. restaurants, $900 million plus in retail sales of consumer-packaged goods, and holding our first global franchisee and supplier convention in nearly a decade, all while transitioning our great leadership team. I am incredibly proud of all we accomplished in 2018 and the foundation we laid to make 2019 and beyond a success.

From a financial standpoint, we achieved nearly 4% revenue growth, nearly 6% adjusted operating income growth, and $2.90 of adjusted earnings per share. Our franchisees opened 392 net new restaurants around the globe, including 278 Dunkin' locations in the U.S., 90% of which were outside of our core Northeast markets.

We more than doubled our initial target of 50 next-generation Dunkin' restaurants, ending the year with 130 new and remodeled next-gens across the country. We also recently unveiled our first Moments restaurant, the new store design for Baskin-Robbins