Recent Posts

DNKN Dropping Coverage as Acquisition Closes

With this report, we drop coverage of Dunkin’ Brands Group (former ticker symbol DNKN) as its acquisition by privately-held Inspire Brands closed earlier today. Our former rating, EPS estimates, same-store sales forecasts, and other projections/ opinions should no longer be relied upon. (We drop all of our prior EPS estimates and target price with this report.) Inspire Brands is itself owned by privately-held Roark Capital. By our math, Roark Capital’s 20+ restaurant concepts generated approximately […]

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12:00 AM

DNKN (Post-Call) Will it Stay or Will it Go Now

Earlier today, Dunkin’ Brands Group (DNKN; Neutral, $100.73) reported adjusted Q3 EPS of $0.93, ahead of our $0.81 forecast and sell-side consensus (according to Consensus Metrix) of $0.80. Helping to drive the beat were: (1) Occupancy Expenses for Franchised Restaurants/Franchise Fees and Royalty Income (5.2% actual vs. our 6.1% estimate), and (2) Depreciation & Other/Total Revenues (1.4% actual vs. our 1.6% estimate). The 24.2% adjusted tax rate was also more favorable than our 26.2% estimate, […]

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12:00 AM

DNKN The New York Times Reports Dunkin’ Could be Acquired by Inspire Brands

Multiple media reports suggest that Dunkin’ Brands Group (DNKN; Neutral, $88.79) could be acquired by privately-held Inspire Brands, with an announcement possible as soon as tomorrow (Monday) morning. Expect DNKN shares to open in Monday’s regular trading session at roughly +20% higher than Friday’s closing price of $88.79. As best as we can tell, The New York Times was the first with the story, stating that “Dunkin’ Brands, the parent company of the Dunkin’ and […]

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12:00 AM

Updating our Q3E Kalinowski Quick-Service Other Same-Store Sales Index

With this report, we update our data-driven Kalinowski Quick-Service Other Index for Q3E to +4.3%. As a reminder, we define “quick-service other” as all quick-service concepts excluding the pizza, burger, and sandwich categories. At present, sell-side consensus is less optimistic than us as regards the quickservice other segment’s same-store sales for the third quarter. When we weight the segment components identically as they’re weighted in the Kalinowski Quick-Service Other Index, and apply the current consensus […]

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12:00 AM

DNKN Charli Says To Adjust Our Q3E Estimates

In part given the strength of Dunkin’s promotion with TikTok star Charli D’Amelio, we raise our Q3E same-store sales forecast for the Dunkin’ U.S. business by +50 basis points, to -1.0%. According to Consensus Metrix, sell-side consensus is at -1.9% as of this writing. Dunkin’ Brands Group has previously indicated that for the week ended July 25th, Dunkin’ U.S. same-store sales were down by “low-single digits for open stores.” There is a good chance that […]

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12:00 AM

DNKN (Post-Call) Improving Sales Trends Closing More Low-Performing Units

Earlier today, Dunkin’ Brands Group (DNKN; Neutral, $71.68) reported adjusted Q2 EPS of $0.49, beating our $0.46 estimate, and matching sell-side consensus (according to Consensus Metrix) of $0.49. Relative to our model, GA&/Revenues caused the upside (18.2% actual vs. 20.0% forecasted). Same-store sales for the core Dunkin’ U.S. business declined by -18.7% in Q2, in between our -18.0% projection and consensus of -19.5%. Same-store sales improved every month during Q2. On today’s conference call, management […]

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12:00 AM

DNKN (Post-Call) Raising Our Go-Forward EPS Estimates

Earlier today, Dunkin’ Brands Group (DNKN; Neutral, $64.69) reported Q1 adjusted EPS of $0.67, ahead of our $0.61 forecast and sell-side consensus (according to Consensus Metrix) of $0.59. First-quarter same-store sales for the core Dunkin’ U.S. business declined by -2.0%. This was better than our -3.5% projection and consensus of -6.7%. Dunkin’ U.S. samestore sales were down by -19.4% in the last three weeks of Q1, which for the company ended on March 28th. In […]

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12:00 AM

DNKN Updating Our Same-Store Sales and EPS Estimates for 2020E & 2021E

We lower our U.S. same-store sales estimates for Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]) as follows: Q1E 2020: down by -5.5 percentage points to -3.5% Q2E 2020: down by -32.0 percentage points to -30.0% Q3E 2020: down by -17.0 percentage points to -15.0% Q4E 2020: down by -11.5 percentage points to -10.0% Full-year 2020E: down by -16.5 percentage points to -14.6% Full-year 2021E: up by +6.5 percentage points to +8.0% For our updated […]

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12:00 AM

DNKN (Post-Call) 2020 EPS Guidance Weighs on the Stock Somewhat

Earlier today, Dunkin’ Brands Group (DNKN; Neutral) reported adjusted Q4 2019 EPS came to $0.73, ahead of our $0.71 forecast and sell-side consensus (according to Consensus Metrix) of $0.70. However, DNKN shares are under some pressure this morning as the newly-stated adjusted EPS target from the company for 2020 is $3.16-$3.21; this is below sell-side consensus of $3.29. We lower our full-year 2020E EPS estimate by -$0.09, to $3.20, as we note: (1) an investment […]

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12:00 AM

DNKN (Post-Call) Not Spooked by a Favorable Q3 Tax Rate

Earlier today, Dunkin’ Brands Group (DNKN; Neutral) reported adjusted Q3 EPS of $0.90, surpassing our $0.81 forecast and sell-side consensus (according to Consensus Metrix) of $0.81. We attribute about $0.06-$0.07 of the EPS beat to a better-than-expected adjusted tax rate (21.9% actual vs. 27.7% forecasted and 27.8% consensus). The core Dunkin’ U.S. business posted +1.5% same-store sales growth, matching our +1.5% projection, and coming in close to sell-side consensus of +1.6%. We stick with our […]

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12:00 AM

DNKN Updating Introducing Some EPS Estimates Highlighting Some Test Beverages

With this report, we introduce our quarterly EPS estimates for 2020E for Dunkin’ Brands Group (DNKN; Neutral). They are as follows: (1) Q1E $0.70, (2) Q2E $0.91, (3) Q3E $0.88, and (4) Q4E $0.78. These quarterlies sum to our unchanged full-year 2020E EPS forecast of $3.27, which lies two cents above sell-side consensus of $3.25 (according to data from Consensus Metrix). Also with this report, we introduce our full-year 2021E EPS projection of $3.55. This […]

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12:00 AM

DNKN (Post-Call) Looking Beyond Q2

Earlier today, Dunkin’ Brands Group (DNKN; Neutral) reported Q2 adjusted EPS of $0.86, surpassing our $0.82 forecast and sell-side consensus (according to Consensus Metrix) of $0.82. Dunkin’ notes that about two cents of the EPS beat is due to “recognized excess tax benefits.” Second-quarter same-store sales for the core Dunkin’ U.S. business rose by +1.7%, near our +1.5% projection and sell-side consensus of +1.4%. The company notes that “Espresso, a critical component of our beverage-led […]

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12:00 AM

DNKN 2019 Franchise Disclosure Document Review for Dunkin

Not too long ago, the Dunkin’ concept owned and franchised by Dunkin’ Brands Group (DNKN; Neutral) filed its 700+ page Franchise Disclosure Document (FDD) for 2019. In this report, we cite some of the highlights from that document following our review of it, including our review of it in comparison to last year’s Franchise Disclosure Document. For example, we note that the average cost of goods sold for a Dunkin’ unit in the continental U.S. […]

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12:00 AM

Updating our Q2E19 Kalinowski Quick-Service Other Same-Store Index

With this report, we increase our data-driven Kalinowski Quick-Service Other Index for Q2E by +30 basis points, to +2.6%. This figure is based on our latest proprietary checks/data as regards same-store sales performance for this segment during April 2019 and the beginning of May 2019. As a reminder, we define the quick-service other category as all quick-service except for the burger, sandwich, pizza, and fast-casual categories. At present, sell-side consensus is less optimistic than us […]

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12:00 AM

Are Protein Costs Poised to Accelerate Over 2019-21

African Swine Fever (ASF) is spreading rapidly not only in China — where it seems as many hogs have been culled from herds in that country as there are born in the entire United States in any given year — but also in other parts of Asia, not to mention parts of Europe. Based on our conversations with suppliers to the restaurant industry, and also with privately-held restaurant companies, we believe that commodity-cost risks over […]

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12:00 AM

DNKN (Post-Call) Espresso-Charged SameStore Sales in Q1

Earlier today, Dunkin’ Brands Group (DNKN; Neutral) reported first-quarter adjusted EPS of $0.67, five cents above our $0.62 forecast and consensus of $0.62. Dunkin’ U.S. same-store sales growth of +2.4% is likely to please investors, particularly following the disappointment of Q4 2018, although keep in mind the -0.5% year-ago figure that was lapped, too. Year-over-year comparisons will get slightly less easy in Q2/Q3. Nevertheless, the +2.4% figure is Dunkin’ U.S.’ best quarterly showing since a […]

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12:00 AM

Tidbits re MCD, DNKN… and more DNKN

We briefly note the following tidbits regarding McDonald’s (MCD; Buy), Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]), and more Dunkin’: * McDONALD’S. Skift table reports that for February 2019 “McDonald’s led all [restaurant] companies in [TV] advertising dollars spent at $48 million, less than what the chain allocated in January. Taco Bell (second on the list) cut its TV advertising funding by nearly half, likely due to Grubhub picking up most of the tab […]

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12:00 AM

Tidbits re KFC (owned by YUM), DNKN, and DPZ

We briefly note the following tidbits regarding KFC (owned by Yum Brands [YUM; Buy]), Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]), and Domino’s (DPZ; Buy): * KFC UK. Multiple UK-based media outlets report that another supplier issue may be brewing as regards KFC UK. For example, in an article dated March 14th, The Sun reports that “KFC fans fear another chicken shortage after main supplier DHL quit. From Monday [March 18th] the finger-lickin’-good food […]

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12:00 AM

Introducing our Q1E Kalinowski Quick-Service Other Same-Store Sales Index

With this report, we introduce our data-driven Kalinowski Quick-Service Other Index for Q1E at +1.9%. This figure is based on our latest proprietary checks/data as regards same-store sales performance for this segment during January 2019 and most of February 2019. As a reminder, we define the quick-service other category as all quick-service except for the burger, sandwich, pizza, and fast-casual categories. At present, sell-side consensus is more optimistic than us as regards Q1E. When we […]

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12:00 AM

Tidbits re DPZ, DNKN, and MCD

We briefly note the following tidbits regarding Domino’s (DPZ; Buy), Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]), and McDonald’s (MCD; Buy): * DOMINO’S. Kalinowski Equity Research is hosting a headquarters visit to Domino’s Pizza (DPZ) in Ann Arbor, Michigan on Wednesday, May 22nd. Management attendees will include CEO Ritch Allison and EVP & CFO Jeff Lawrence. * KALINOWSKI’S TAKE: This will be an excellent opportunity for Q&A with Mr. Allison (who became CEO of […]

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12:00 AM

Tidbits re DNKN, Taco Bell (owned by YUM), and CAKE

We briefly note the following tidbits regarding Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]), Taco Bell (owned by Yum Brands [YUM; Buy]), and The Cheesecake Factory (CAKE; Neutral): * DUNKIN’. We look for Dunkin’ to introduce an Irish Creme Swirl and a Mint Brownie Donut as part of the promotional approach for March 2019. In addition, a $2 medium iced coffee for the hours of 2-6 PM could be part of the promotional calendar […]

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12:00 AM

Tidbits re Taco Bell, Baskin-Robbins, and MidSized Restaurant Concepts

We briefly note the following tidbits regarding Taco Bell (owned by Yum Brands [YUM; Buy]), Baskin-Robbins (owned by Dunkin’ Brands Group [DNKN; Neutral]), and mid-sized restaurant concepts: * TACO BELL. In our January 22nd report “Tidbits re: Taco Bell (owned by YUM), DPZ, and MCD” we indicated that Taco Bell would launch Rattlesnake Fries nationwide in late February. We now have some additional details… first, the fries will actually be Steak Rattlesnake Fries (see following […]

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12:00 AM

DNKN (PRE-CALL) THESIS DECAFFEINATES UPDATING RATING

Earlier this morning, Dunkin’ Brands Group (DNKN; Buy) reported adjusted Q4 2018 EPS of $0.68, ahead of our $0.62 forecast and sell-side consensus (according to Consensus Metrix) of $0.62. We attribute this in part to better-than-expected Occupancy Expenses-Franchised Restaurants/Franchise Fees and Royalty Income (4.7% actual vs. our 5.1% estimated) and Cost of Ice Cream and Other Products/ Sales of Ice Cream and Other Products (5.1% actual vs. 6.2% forecasted). On the other hand, and arguably […]

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12:00 AM

Tidbits re SBUX, Applebee’s (owned by DIN), DNKN, and CMG

We briefly note the following tidbits regarding Starbucks (SBUX; Neutral), Applebee’s (owned by Dine Brands [DIN; Buy]), Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]), and Chipotle Mexican Grill (CMG; Not Rated): * STARBUCKS. Multiple media reports indicate that on this evening’s episode of the CBS program 60 Minutes, Starbucks founder, chairman emeritus, and longtime CEO Howard Schultz will state that he is strongly considering running for U.S. president as an independent candidate. For example, […]

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12:00 AM

Updating our Q4E Kalinowski Quick-Service Other Same-Store Sales Index 1.19

With this report, we update our data-driven Kalinowski Quick-Service Other Index for Q4E from +2.2% to +3.1%. This 90 basis-point increase is based on our latest proprietary checks/data as regards same-store sales performance for the second half of November and all of December. Sell-side consensus is currently not as optimistic as us regarding the outlook for Q4E same-store sales for the quick-service other sector, which we define as quick-service excluding burger, sandwich, pizza, and fast-casual […]

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12:00 AM

DNKN DATA-DRIVEN CHECKS LEAD TO RATINGS CHANGE…

Based on our data-driven checks, we upgrade the shares of Dunkin’ Brands Group (DNKN) from Neutral to Buy. Our checks regarding the fourth quarter lead us to raise our Q4E same-store sales forecast for the core Dunkin’ U.S. business by 60 basis points, to +2.1%, which according to Consensus Metrix data becomes the new sellside high. Sell-side consensus is at +1.4% as of this writing. In addition, our checks regarding the first half of January […]

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12:00 AM

Tidbits re MCD, Luckin Coffee, CAKE, and DNKN

We briefly note the following tidbits regarding McDonald’s (MCD; Buy), privatelyheld Luckin Coffee, The Cheesecake Factory (CAKE; Neutral), and Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]): * McDONALD’S. Business Insider reports that “McDonald’s is taking a page out of Dunkin’s playbook to drum up excitement about breakfast. In February the chain plans to launch ‘Donut Sticks’ as a limited-time offering, according to internal documents viewed by Business Insider. The strips of deep-fried dough, sprinkled […]

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12:00 AM

Tidbits re Applebee’s (owned by DIN), DNKN, and Chick-fil-A

We briefly note the following tidbits regarding Applebee’s (owned by Dine Brands [DIN; Buy]), Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]), and privatelyheld Chick-fil-A: * APPLEBEE’S. Breaking news! We have learned that the January 2019 Neighborhood Drink Special at Applebee’s will be a $2 Captain & Coke (Captain Morgan rum and Coca-Cola). * KALINOWSKI’S TAKE: During January 2018, the Neighborhood Drink Special was a $2 Blue Moon beer. From a year-over-year perspective, we would […]

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12:00 AM

Tidbits re DNKN, Burger King (owned by QSR), PZZA, & Inspire Brands CAKE

We briefly note the following tidbits regarding Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]), Burger King (owned by Restaurant Brands International [QSR; Not Rated]), Papa John’s (PZZA; Buy), and privately-held Inspire Brands as it relates to The Cheesecake Factory (CAKE; Neutral): * DUNKIN’. Breaking news! Dunkin’ is testing Bagel Minis in at least one market, according to an Instagram post we’ve seen, and info from our industry contacts. Read the Full Report

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12:00 AM

Update Regarding the Q4E Kalinowski QuickService Other Same-Store Sales Index

With our channel checks for October and the first half of November complete, we retain our +2.2% number for Q4E as regards the data-driven Kalinowski Quick-Service Other Index. At present, sell-side consensus is slightly more optimistic than us regarding the outlook for Q4E same-store sales regarding the quick-service other sector. (As a reminder, we define “quick-service other” as quick-service concepts excluding burger, sandwich, and pizza chains.) When we weight the segment components identically as they’re […]

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12:00 AM

Tidbits re DPZ, DNKN, and Chain Restaurant Same-Store Sales Trends in Britain

We briefly note the following tidbits regarding Domino’s (DPZ; Buy), Dunkin’ (owned by Dunkin’ Brands Group [DNKN; Neutral]), and restaurant same-store sales trends in Britain: * DOMINO’S. In our November 8th tidbits note, we noted how privately-held Little Caesars had exited the Kansas City market — and how this could be good news from the perspective of competitors, such as Domino’s. Now, Boston.com reports that “The company that owns Papa Gino’s and D’Angelo sandwich shops […]

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12:00 AM

DNKN Dunkin’ U.S. Launching Several New Menu Items on November 19th

Breaking news! We have learned that Dunkin’ Donuts (owned by Dunkin Brands Group [DNKN; Neutral]) plans to launch quite a few new menu items nationwide in the U.S. on (or about) November 19th. These include the following limited-time-only menu items: a Holiday Spice Bacon sandwich, a White Chocolate Swirl beverage, a Cinnamon Sticky Bun Swirl beverage, a Dear Santa Donut, a Hershey’s Kisses Donut, and Cinnamon Cream Cheese Spread. In addition, as part of the […]

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12:00 AM

DNKN (Post-Call) The Breakfast Battle Heats Up

Earlier today, Dunkin’ Brands Group (DNKN; Neutral) reported adjusted Q3 EPS of $0.83, well ahead of our $0.72 forecast and sell-side consensus of $0.73, as measured by Consensus Metrix. The company quantifies the Q3 recognized excess tax benefits as helping adjusted Q3 EPS by $0.09. This means that excluding this taxrate help, Q3 EPS beat our estimate by $0.02 and consensus by $0.01. We attribute the outperformance to higher-than-expected Franchise Fees and Royalty Income, helped […]

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