Profits Are Brewing
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.)