Dunkin’ Brands reports higher sales last quarter

A box of donuts from a Dunkin' store in California.REUTERS

Dunkin' stores are recovering, despite the ongoing pandemic that continues to take a toll on smaller businesses after seven months of the coronavirus in the United States.

The coffee chain reported sales in the US were up about 1 percent in the third quarter from the same period last year, while in the second quarter, sales were still down nearly 19 percent.

On a conference call with investors Thursday morning, Dave Hoffmann, the chief executive of Canton-based Dunkin' Brands Group Inc., credited Dunkin’s performance to its menu alterations, new coffee equipment, and mobile app improvements.

“The pandemic has challenged the US economy, in particular, small businesses including restaurants," Hoffmann said. “However ... we quickly adapted our brand to anticipate the changing consumer landscape.”

Dunkin’s more than 9,100 stores in the US make up over 80 percent of the company’s operating income. About 1,100 stores are located in Massachusetts.

Dunkin' Brands also owns Baskin-Robbins, and the company said store sales in the US at the ice cream chain were up 6.5 percent in the third quarter compared to last year.

Overall, third-quarter revenues at Dunkin' Brands increased 1.6 percent, year over year, to $361.5 million.

But the company noted Dunkin' locations in dense cities, like Boston, are not on the same course of recovery during the pandemic.

“We still have a small population of restaurants that we are closely monitoring the performance of, including many in New York City as well as other urban markets like Boston, where many corporate offices have yet to return to fully open,” said Kate Jaspon, chief financial officer of Dunkin' Brands.

According to Second Measure, a firm that analyzes transaction data, Boston’s city-level Dunkin’ sales were down over 50 percent in September from the same month last year. In the metro area, which includes the city and surrounding suburbs, sales were down only 6 percent.

The company’s earnings call was a possible deadline for more information on its discussions to be acquired for a reported $8.8 billion by restaurant conglomerate Inspire Brands, but the company declined to comment further. Given the ongoing discussions, the company’s board of directors has “taken no action with respect to a cash dividend” for the fourth quarter," Hoffmann said.

Dunkin' said it has closed more than 460 US stores this year — including 425 housed inside Speedway convenience stores — contributing to closures of over 550 Dunkin' and Baskin-Robbins locations globally.