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Sales and profit rise for Starbucks and Dunkin’ brands

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Seattle-based Starbucks is expanding its college tuition assistance program from two years to four.

America’s love affair with coffee shows no sign of abating, with Starbucks and Dunkin’ Brands reporting higher profits in the first three months of the year.

Starbucks saw its sales in stores open at least a year rise 7 percent, while revenue jumped 18 percent to $4.6 billion in its fiscal second quarter, which ended March 29. Howard Schultz, the chief executive, said it was the 21st consecutive quarter that comparable-store sales grew more than 5 percent.

Profits at Starbucks grew 15.9 percent to $464.9 million, or 33 cents a share, from $427 million, or 28 cents a share, a record.

“Congratulations for a fantastic quarter,” Karen Holthouse, an investment analyst at Goldman Sachs, said during a conference call about the company’s performance.

Schultz said that several new and limited-edition products, like a Flat White espresso drink, Cold Brew iced coffee and the Birthday Cake frappucino, which was sold for just five days, had helped sales.

The company also described some of its efforts to increase customer transactions and attract new customers with mobile payment and ordering systems. Its mobile order system, which started in Portland, Oregon, in December, has been expanded to more than 600 stores in the Northwest and has helped to reduce lines and wait times and improve inventory management, Starbucks executives said. The system will be expanded nationwide this year.

In the second half of this year, Starbucks will test a delivery service in the Empire State Building in New York and also in Seattle. “Mobile order and pay is exceeding our internal goals,” said Kevin Johnson, the president and chief operating officer.

Dunkin’ Brands, one of Starbucks’s biggest competitors, also announced higher sales and earnings on Thursday. Despite the winter’s nasty weather, revenue at Dunkin’, which includes Baskin-Robbins as well as Dunkin’ Donuts, rose 8.1 percent in the quarter that ended March 28, to $185.9 million from $171.9 million.

Those revenues represent royalties and other income that flows to Dunkin’ from its franchisees, which reported sales of $2.3 billion in the quarter, compared with $2.2 billion in the same period last year.

Comparable-store sales in Dunkin’ Donuts stores in the United States grew 2.7 percent, and 8.1 percent in Baskin-Robbins stores.

Dunkin’ said products like its new Dark Roast Coffee, croissant doughnuts and steak sandwiches were among the biggest contributors to sales, though sales of coffee pods and packaged coffee at grocery stores were down.

Earnings rose to $25.6 million, or 40 cents a share, compared with $23 million, or 33 cents a share, in the comparable period last year. That beat estimates by investment analysts, and shares of Dunkin’ rose almost 8 percent on Thursday.

© 2015 The New York Times Company

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