In order to beef up its presence on college campuses, Dunkin’ Donuts, an operational arm of Dunkin Brands Group, Inc. (DNKN - Analyst Report), recently announced the opening of its outlets at 10 college campuses across the Northeast, Mid-Atlantic and Southern United States. The company has already opened outlets in seven of the ten universities, while outlets at others are slated to open by October 15, 2012.
As a matter of fact, the move is also a part of the company’s goal to double its presence in the U.S. over the next 20 years. To shore up this plan, Dunkin’ also recently opened new outlets in several other public locations – like airports, hotels, sports stadiums and amusement parks.
The universities, in which Dunkin’ is going to open outlets, include major American universities – such as Emory University and Montclair State University. However, this is not Dunkin’s first initiation to spread its footprint in campuses. The company has previously been associated with renowned universities such as Boston, New York and George Washington Universities, for years. The success story of Dunkin’ in these campuses depicts the company’s ability to provide various restaurant models meant to suit different environments. The Dunkin’s full retail shops such as outlets designed for universities, bode well among students because of the quality and innovative menu offerings at affordable prices.
Dunkin’ Donuts is focused on its strategy to seize growth opportunities and cater to consumer needs of individual markets. Thus, the company continues to expand through development of single and multi-unit opportunities. In order to be competitive and innovative, Dunkin Donuts offers services through various types of real estate formats including free-standing restaurants, end caps, in-line sites, gas and convenience, travel plazas, university outlets and others.
Dunkin’ has been highly dynamic in its U.S. expansion spree. In the last few weeks, Dunkin’ inked deals with many franchisee groups to expand its footprint in major U.S. markets. In accordance with the deals, the company plans to open three restaurants in Illinois, two in Ohio and 29 in Texas in the coming years.
However, Dunkin’ should be wary of its competitors. Some of the top peer companies – like Yum! Brands, Inc. (YUM - Analyst Report), Darden Restaurants, Inc. (DRI - Analyst Report) and Starbucks Corporation (SBUX - Analyst Report) – have enjoyed a strong presence in these major U.S. markets and submarkets for years.
Dunkin' Donuts is the market leader in the coffee, donut, bagel and muffin categories. The company operates more than 10,000 restaurants worldwide, including more than 7,000 restaurants in 36 states as well as the District of Columbia, and in more than 3,000 international locations in 33 countries.
Dunkin Brands is likely to release its third quarter 2012 earnings on October 31, 2012. The Zacks Consensus Estimate for the third quarter is pegged at 35 cents per share. We presently have a long-term Neutral recommendation on Dunkin Brands. Also, it carries a Zacks #3 Rank (a short-term Hold rating).
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