Dunkin' Brands Group Inc (NASDAQ:DNKN) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 07:00 am ET


Dunkin' Brands Group Inc (NASDAQ:DNKN) Q2 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Dunkin' Brands Second Quarter 2020 Earnings Call. [Operator Instructions]

I would now like to introduce your host for today's program, Stacey Caravella, Senior Director of Investor Relations. Please go ahead.

Stacey Caravella

Thank you, Jonathan, and good morning, everyone. Speaking on today's call will be Dunkin' Brands Chief Executive Officer, Dave Hoffmann; President of Dunkin' Americas, Scott Murphy; and Dunkin' Brands Chief Financial Officer, Kate Jaspon. Following prepared remarks, we'll open the call to questions. 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 this 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.

Now I'll turn the call over to Dave.

Dave Hoffmann

Thanks, Stacey, and thanks, everyone, for joining us early this morning. I want to take a moment upfront to give a heartfelt thank you to everyone listening in. Many of you still working from home. As we navigate our way through this pandemic, we are viewing our business during COVID-19 in terms of three phases: running, working and recovering. So let me start with running. For 70 years, Dunkin' has been keeping America running. While the COVID-19 pandemic is unlike anything we've experienced before, we knew our takeaway model with additional safety protocols in place would serve us well. We have always been the great coffee fast brand and our continued focus on convenience and accessibility, along with beverage and snacking innovation drove sequential improvement of Dunkin' U.S. same-store sales throughout the quarter. Our franchisees went the extra mile to keep the vast majority of our Dunkin' U.S. restaurants open during the second quarter to help our guests get through the day and to provide a sense of normalcy during these times.

As of today, there are fewer than 70 traditional Dunkin' locations still closed, most of which are in Manhattan or Boston. In addition, there are approximately 300 alternative locations closed that are primarily in transportation hubs or on college campuses. In all, approximately 96% of Dunkin' stores in the U.S. are open and that number is similar for Baskin-Robbins U.S. as well. During the second quarter, sales in our newer markets were a bright spot. When other restaurants were closed, we were open. New guests discovered our innovative everyday value-priced beverages and our low contact service options, including drive-thru, On-the-Go Mobile ordering, curbside or delivery. They now know us much more than just the donut brand.

Together with our franchisees, we did what was right in our restaurants to protect dedicated crew members and loyal customers. And going forward, we know that safety remains a high priority for customers. The protocols we implemented very early on, such as mask for crew members, plexiglass at the serving areas