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What Wall Street Expects from Dunkin’ Brands’ Revenue in 4Q17

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Jan. 31 2018, Updated 4:50 p.m. ET

Revenue expectations

For 4Q17, analysts expect Dunkin’ Brands (DNKN) to post revenue of $220.32, which represents growth of 2.1% from $215.71 in 4Q16. The revenue growth is expected to be driven by the addition of new restaurants, positive SSSG (same-store sales growth), and growth in other revenues, which include license fees related to Dunkin’ Donuts’ K-Cup pods and ready-to-drink bottled iced coffee.

By the end of 3Q17, Dunkin’ Brands operated 12,435 Dunkin’ Donut restaurants, compared to 12,258 units in 4Q16. Also, the company operated 7,944 Baskin Robbins restaurants, compared to 7,822 restaurants in 4Q16. So the addition of 177 Dunkin’ Donut restaurants and 122 Baskin Robbins restaurants, along with restaurants opened in 4Q17, are expected to drive the company’s revenue. Also, the company’s management stated that they would be opening 113 to 133 Dunkin’ Donut restaurants and ten Baskin-Robbins restaurants in the United States in 4Q17. In the international market, the company forecast the addition of 50 and 100 net new restaurants for the two brands.

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To drive its SSSG, Dunkin’ Brands has been focusing on menu innovations and simplification, enhancing customer convenience with technological advancements, increasing accessibility, and expanding its loyalty membership. Also, the company has expanded its delivery service by partnering with Door Dash, and it’s extending its drive-through facilities to more restaurants to drive sales.

However, some of the revenue growth is expected to be offset by a decline in Baskin Robbins’s SSSG. The company’s management had stated that they were expecting SSSG for Baskin Robbins in the negative territory in 2H17.

Peer comparisons

During the same period, Starbucks (SBUX) posted revenue growth of 5.9%, while McDonald’s (MCD) and Wendy’s (WEN) are expected to post revenue growth of -13.3% and 1.6%, respectively.

Outlook

For the next four quarters, analysts are expecting Dunkin’ Brands to post revenue of $866.84 million, which represents growth of 2.1% from $849.1 million in the corresponding four quarters of the previous year.

Next in this series, we’ll look at analysts’ EPS expectations for 4Q17.

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