America may not run on Dunkin’ after all.
Dunkin’ Brands, the parent company of Dunkin’ Donuts and the Baskin-Robbins ice cream chain, announced Thursday that one of its franchisees plans to close 100 Dunkin’ Donuts stores in the United States this year and next.
The company did not provide a list of what stores would be closed, but said that they were all owned by the Speedway gas station and convenience store chain.
Dunkin’ stressed that the store closings represent a tiny fraction of its overall revenue and reiterated that it plans to still open more new stores in California soon as well as internationally.
Grant Benson, vice president of global franchising and business development for Dunkin’ Brands, added that the stores were not being closed due to poor performance.
But Dunkin’ Brands (DNKN) also lowered its outlook for the third quarter — to just 1.1% same-store sales growth — as fewer customers came to the stores.
And it issued earnings guidance for the year that was a bit below Wall Street’s consensus estimates.
Investors acted as if Dunkin’ just spilled a scalding hot Box ‘O Joe in their laps. Shares plunged more than 12% on the news.
Dunkin’ disclosed the news in a regulatory filing before its annual investor and analyst day Thursday.
During the presentation, Dunkin’ Donuts U.S. and Canada president Paul Twohig said the company was disappointed with results in the U.S.
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SOURCE: CNN, Paul R. La Monica