Dunkin Brands
Dunkin Profile
Last year, Dunkin generated $1.37 billion in sales from 12,871 locations. The coronavirus has led to a short-term drop in sales although there's been a rapid recovery from the lows.
Dunkin has a very profitable, franchise-based model in which it manages to have 94% gross margins. Its stock is up 150% from its March lows and made new, all-time highs in late-September.
It's also unique that it's one of a handful of restaurant stocks that are actually doing well in this environment. After the crisis passes whether that's in 2022 or 2023, it will probably have more market share as many restaurants will have gone bankrupt.
Since going public in 2011, Dunkin Brands' stock has been a consistent outperformer. If it takes the offer from Inspire Brands at $106.50 per share, the stock will have a 596% gain over its nine years as a public company. For shareholders, it's bittersweet given that the stock looked to have more legs to keep going higher and was increasing dividends at an above-average rate.
In its recent conference call following its earnings report, Dunkin said that sales were down by 20% with the most losses in early-morning hours due to less commute. However, some of that was being replaced by people coming in later the day who tended to order more expensive items like espressos. In recent years, Dunkin has shifted its focus from donuts to more, higher-margin specialty beverages to directly compete with Starbucks