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Dunkin' Donuts Curbs Expansion Plans As Customer Traffic Slows

CANTON (CBS/AP) -- Dunkin' Donuts says customer traffic to the chain's established U.S. stores slowed during the second quarter compared to a year ago.

That marked the fifth straight quarter the figure has dropped, although higher spending per visit pushed up sales by 0.8 percent. CEO Nigel Travis noted that the chain's loyalty program and other plans could help attract more customers.

For the year, Dunkin also now expects to add between 330 and 350 additional locations, down from its previous forecast of 385 new locations. The company cited upcoming new store models and investments required for new equipment and technology for the conservative outlook. Dunkin' said it still expects to finish the year as one of the fastest growing restaurant chains in the country.

Dunkin' Donuts
(Photo by Tim Boyle/Getty Images)

These numbers come following news that Dunkin' will be testing a smaller menu at about 1,000 locations, including some in New England.

The chain had introduced "bakery" sandwiches such as ham and cheese as well as turkey, cheddar and bacon in 2012 with the hope of boosting food sales after breakfast hours. But Travis says people are eating breakfast sandwiches throughout the day, and that paring down slower-selling items makes operations easier for employees.

Click here for more on the menu items being eliminated. 

Overseas, Dunkin' sales fell 2.8 percent at established locations during the quarter. Baskin Robbins' sales dropped 0.9 percent in the U.S., and rose 3.3 percent at established locations overseas.

For the quarter ended July 1, Dunkin' Brands Group Inc. earned $55.7 million, or 60 cents per share. Earnings adjusted to exclude one-time items were 64 cents per share. That was 2 cents better than analysts expected, according to Zacks Investment Research.

The Canton, Massachusetts-based company's total revenue was $218.5 million in the period, which missed Street forecasts.

Dunkin' expects full-year earnings in the range of $2.40 to $2.43 per share.

Dunkin' shares, which rose 48 cents to $53.00 in Thursday trading, had increased slightly since the beginning of the year. The stock had climbed 14 percent in the last 12 months.

(© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)

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