Why Investors Are Optimistic about Dunkin’ Brands’ 3Q17 Earnings


Oct. 23 2017, Updated 7:43 a.m. ET

Stock performance

Dunkin’ Brands (DNKN) is scheduled to announce its 3Q17 earnings before the market opens on October 26, 2017. On October 19, 2017, the company was trading at $55.96, which represents a return potential of 6.5% since the announcement of its 2Q17 earnings on July 26, 2017.

In 2Q17, Dunkin’ Brands posted adjusted earnings per share (or EPS) of $0.64 on revenues of $218.5 million. Analysts expected the company to post EPS of $0.62 on revenues of $220.7 million. 

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After its 2Q17 earnings, the company’s management had reaffirmed its SSSG (same-store sales growth), revenues, and EPS guidance for 2017. The better-than-expected 2Q17 earnings and initiatives taken by the company’s management appear to have increased investors’ confidence, leading to a rise in the company’s stock price. 

The company’s initiatives include menu innovations, menu simplifications, and remodeling of restaurants to improve its SSSG.

Year-to-date performance

Since the beginning of 2017, Dunkin’ Brands has returned 6.7%, while its peers McDonald’s (MCD), Starbucks (SBUX), and Wendy’s (WEN) have returned 36.8%, -0.2%, and 15.9%, respectively.

The iShares US Consumer Services ETF (IYC) and the S&P 500 Index (SPX) have returned 9.2% and 14.4%, respectively.

Series overview

With Dunkin’ Brands’ 3Q17 earnings around the corner, we will focus on analysts’ estimated revenues and earnings per share. We will also cover the management’s guidance for 2017 and analysts estimates for the next four quarters. 

Finally, we’ll wrap up this series by looking at the company’s valuation multiple and analysts’ recommendations.

Let’s start our analysis by looking at the analysts’ revenue estimates.


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