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.)

Read More »
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, helping Q3 adjusted EPS by about +2 cents.

Read More »
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.

Read More »
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.

Read More »
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%

Read More »
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).

Read More »
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).

Read More »
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.”

Read More »
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. for the 12 months ended October 31, 2018 was 26.9% of sales (please keep in mind that all Dunkin’ units are franchised). The average labor cost was 27.8% of sales. These figures were up year-over-year by ten basis points and 20 basis points, respectively. Also, the average freestanding Dunkin’ unit in the continental U.S. generated average sales of $1,299,700 (for the 12-month period ending October 27, 2018) for units with a drive-thru, and average sales of $1,032,159 (for the same time period) for units lacking a drive-thru. The year-ago averages from the 2018 FDD were $1,299,922 and $1,041,001, respectively. We maintain our Neutral rating on DNKN and note the following:

Read More »
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 the next 1-3 years from proteins may be higher than the Street currently anticipates. The sources of this are many, including: (1) uncertainty regarding just how massive the ASF issue is in China, (2) the time it will take to replenish swine supplies in China — the time from gestation to slaughter is typically more than 30 months, and (3) the not-zero possibility that ASF could make its way to the United States, although efforts are being made on multiple fronts to prevent that from happening. As many involved note, the situation regarding ASF remains fast-moving and difficult to quantify.

Read More »
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):

Read More »
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).

Read More »
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.

Read More »
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]):

Read More »
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 brand’s “new espresso experience” that it announced this past October 24th, it will introduce an Iced Cappuccino and an Iced Americano, both on a permanent basis. Decaf Espresso Pods (for baristas only) will also be made available, and surely will come in handy as part of this new espresso experience.

Read More »
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 in part by better-than-expected same-store sales by the Baskin-Robbins U.S., Dunkin’ International, and Baskin-Robbins International business segments.

Read More »
12:00 AM
View All Reports