Prof­its Are Brew­ing

The Saratogian (Saratoga, NY) - - BUSINESS -

Dunkin’ Donuts par­ent Dunkin’ Brands (Nas­daq: DNKN) is reap­ing re­wards from its On­the-Go Mo­bile plat­form and the in­tro­duc­tion of new of­fer­ings such as premium espresso drinks and breakfast sand­wiches. For ex­am­ple, the se­cond and third quar­ters of this year saw 30% and 40% year-over-year growth, re­spec­tively, in espresso sales — in­fring­ing on Star­bucks’ turf.

Dunkin’ opened dozens of new lo­ca­tions dur­ing its last quar­ter and now sports more than 13,000 Dunkin’ Donuts and 8,000 Baskin-Robbins lo­ca­tions. It’s re­mod­el­ing hun­dreds of stores an­nu­ally — up­grad­ing their ap­pear­ance and in­creas­ing the out­put of high-profit-mar­gin items such as cold-brew drinks.

Dunkin’ is mid­way through a three-year strate­gic plan an­nounced back in Fe­bru­ary 2018. Its “Blueprint for Growth” in­volves a drive to steadily in­crease both rev­enue growth and op­er­at­ing in­come. It plans to ex­pand the Dunkin’ reach via 1,000 ad­di­tional lo­ca­tions by late 2020, aim­ing for an even­tual to­tal of 18,000 U.S. lo­ca­tions.

To all this, add a div­i­dend that re­cently yielded 2%, and Dunkin’ Brands is a promis­ing propo­si­tion for long-term in­vestors. (The Mot­ley Fool has rec­om­mended both Dunkin’ Brands and Star­bucks; it owns shares of Star­bucks.)

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