Dunkin’ Donuts, a limited service café
Dunkin’ Donuts under the umbrella of Dunkin’ Brands (DNKN) falls under the limited service café category of food distribution place. The menu includes several types of breakfast sandwiches and bakery items such as bagels, donuts, cookies, croissants, Danishes, and muffins. It also serves flavored, decaf, and regular coffee as well as iced and frozen beverages.
Revenue and growth
The United States is an important market for Dunkin’ Donuts. In a later part of this series, we’ll see how the company has positioned its unit growth. There are more Dunkin’ Donuts locations in the United States than in its international market. About 76% of Dunkin’ Brands’ revenue in 2014 came from the Dunkin’ Donuts concept.
Dunkin’ Donuts’ combined revenue from national as well as international units was $569 million in 2014. Of that, about $548 million came from the US market alone.
Dunkin’ Donuts is subject to some seasonality, with cold beverage sales higher in the summer and spring seasons and hot beverage sales higher in the winter and fall seasons.
Dunkin’ Brands also retails its branded coffee at the Dunkin’ Donuts stores as well as at grocery chains.
What about its peers?
Starbucks (SBUX), which competes in the same segment, offers various blends of coffee, tea, breakfast sandwiches, and muffins. McDonald’s (MCD) and Taco Bell, under the umbrella of Yum! Brands (YUM), also offer breakfast menus. We’ll look at how these companies have taken advantage of sales leverage later in this series. Sales leverage is positive for ETFs in the consumer discretionary sector (XLY)(RXI). XLY holds about 10% of restaurant stocks in its portfolio.