Analysts’ revenue expectations
For 2019, analysts forecast Dunkin’ Brands (DNKN) to post revenue of $1.37 billion, which implies a rise of 3.8% from $1.32 billion in 2018. The opening of new Dunkin’ restaurants, positive SSSG (same-store sales growth) in both Dunkin’ and Baskin-Robbins restaurants and growth in sales of consumer packaged goods are likely to drive the company’s revenue this year.
DNKN’s management expects to open 200 to 250 new Dunkin’ U.S. restaurants this year while closing ten underperforming Baskin-Robbins’ franchised restaurants in the US. For this year, the management is also forecasting both of its brands to post SSSG in the low-single digits. The revenue from consumer-packaged goods is also expected to rise in the range of low-to-mid-single digit percent.
Dunkin’ Brands is focusing on expanding its delivery service, remodeling its old restaurants to NextGen restaurants, menu innovations, especially in the cold beverage category, and various marketing and promotional offerings to drive its SSSG.
On June 17, the company announced that it has partnered with Grubhub to roll out a delivery service across its Dunkin’ restaurants in the US. Starting on June 17, the company has launched the delivery service in 400 Dunkin’ restaurants located in five boroughs of New York. The company also plans to expand the service to 3,000, or one-third, of US Dunkin’ restaurants by the end of this year and ~70% of US Dunkin’ restaurants by the end of the next year.
At the end of the first quarter, Dunkin’ operated ~200 NextGen design restaurants. The results appear to have encouraged the company’s management to implement the new design in more restaurants to enable faster service, which could enhance the customer experience. After completing the process of menu simplification in 2018, Dunkin’s management is focusing on simplifying its operations through the adoption of new technology to improve speed and order accuracy, thus improving customer satisfaction.