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Dunkin' Brands (DNKN) Q2 Earnings: What's in the Cards?
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Dunkin' Brands Group, Inc. is set to release second-quarter 2018 numbers on Jul 26, before market open. In the first quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 19.2%.
Q2 Expectations
The question lingering in investors’ minds now is whether Dunkin' Brands will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for second-quarter earnings is pegged at 74 cents, higher than 64 cents reported in the year-ago quarter. Of late, the company’s earnings estimates have been stable. In first-quarter 2018, it witnessed earnings growth of 21.6% on a year-over-year basis.
Meanwhile, analysts polled by Zacks expect revenues of nearly $342.5 million, up 56.7% from the prior-year quarter.
Let’s delve deeper to find out how the company’s top and bottom line will shape up this earnings season.
Factors at Play
Dunkin' Brands, which operates through the Dunkin' Donuts and Baskin-Robbins brands, is likely to gain from menu innovations, breakfast menu optimization, loyalty programs, digital and sales building initiatives.
Meanwhile, the company continues to boost sales through regular product launches. With the demand for coffee expected to grow in the coming days, Dunkin Donuts’ is consistently adding new coffee beverages to its menu, both in the value and premium offering segments like the Macchiato's line of products and the recent cold brew coffee. On an incremental sales basis, cold brew has been the most successful product launch and is helping to drive the brand’s coffee credibility.
Given its growing popularity, the company is also expanding its footprint in the emerging markets of Asia and the Middle East. Moreover, it believes that the untapped market of South Africa has a great market potential. Dunkin' Brands inked a franchise agreement to develop more than 250 Dunkin' Donuts restaurants and over 70 Baskin-Robbins shops in therein, over the coming years. Such expansion strategies should boost the company’s top-line performance.
Furthermore, Dunkin' Brands operates on a full-fledged franchise model. We believe re-franchising a large chunk of its system will reduce the company’s capital requirements and facilitate earnings per share growth.
However, the U.S. ice cream industry is shrinking gradually. In the recent times, the trend of ice cream consumption at home has increased as several key brands are now available at grocery stores. Also, consumers are shifting more toward healthy frozen yogurt, and fruit and vegetable-based flavors. These, in turn, might hurt sales at ice cream parlors and affect Dunkin' Brand's results in the to-be-reported quarter.
Dunkin' Brands Group, Inc. Price, Consensus and EPS Surprise
Our proven model shows that Dunkin' Brands is likely to beat earnings estimates in second-quarter 2018. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are a few other stocks from the Restaurant space that investors may consider as our model shows that they have the right combination of elements to post an earnings beat in the second quarter:
The Wendy's Company (WEN - Free Report) has an Earnings ESP of +1.59% and a Zacks Rank #2.
Brinker International, Inc. (EAT - Free Report) has an Earnings ESP of +1.20% and a Zacks Rank of 3.
The Cheesecake Factory Incorporated (CAKE - Free Report) has an Earnings ESP of +1.66% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Dunkin' Brands (DNKN) Q2 Earnings: What's in the Cards?
Dunkin' Brands Group, Inc. is set to release second-quarter 2018 numbers on Jul 26, before market open. In the first quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 19.2%.
Q2 Expectations
The question lingering in investors’ minds now is whether Dunkin' Brands will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for second-quarter earnings is pegged at 74 cents, higher than 64 cents reported in the year-ago quarter. Of late, the company’s earnings estimates have been stable. In first-quarter 2018, it witnessed earnings growth of 21.6% on a year-over-year basis.
Meanwhile, analysts polled by Zacks expect revenues of nearly $342.5 million, up 56.7% from the prior-year quarter.
Let’s delve deeper to find out how the company’s top and bottom line will shape up this earnings season.
Factors at Play
Dunkin' Brands, which operates through the Dunkin' Donuts and Baskin-Robbins brands, is likely to gain from menu innovations, breakfast menu optimization, loyalty programs, digital and sales building initiatives.
Meanwhile, the company continues to boost sales through regular product launches. With the demand for coffee expected to grow in the coming days, Dunkin Donuts’ is consistently adding new coffee beverages to its menu, both in the value and premium offering segments like the Macchiato's line of products and the recent cold brew coffee. On an incremental sales basis, cold brew has been the most successful product launch and is helping to drive the brand’s coffee credibility.
Given its growing popularity, the company is also expanding its footprint in the emerging markets of Asia and the Middle East. Moreover, it believes that the untapped market of South Africa has a great market potential. Dunkin' Brands inked a franchise agreement to develop more than 250 Dunkin' Donuts restaurants and over 70 Baskin-Robbins shops in therein, over the coming years. Such expansion strategies should boost the company’s top-line performance.
Furthermore, Dunkin' Brands operates on a full-fledged franchise model. We believe re-franchising a large chunk of its system will reduce the company’s capital requirements and facilitate earnings per share growth.
However, the U.S. ice cream industry is shrinking gradually. In the recent times, the trend of ice cream consumption at home has increased as several key brands are now available at grocery stores. Also, consumers are shifting more toward healthy frozen yogurt, and fruit and vegetable-based flavors. These, in turn, might hurt sales at ice cream parlors and affect Dunkin' Brand's results in the to-be-reported quarter.
Dunkin' Brands Group, Inc. Price, Consensus and EPS Surprise
Dunkin' Brands Group, Inc. Price, Consensus and EPS Surprise | Dunkin' Brands Group, Inc. Quote
What Does the Zacks Model Unveil?
Our proven model shows that Dunkin' Brands is likely to beat earnings estimates in second-quarter 2018. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dunkin' Brands has an Earnings ESP of +0.36% and a Zacks Rank #1, a combination that increases the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are a few other stocks from the Restaurant space that investors may consider as our model shows that they have the right combination of elements to post an earnings beat in the second quarter:
The Wendy's Company (WEN - Free Report) has an Earnings ESP of +1.59% and a Zacks Rank #2.
Brinker International, Inc. (EAT - Free Report) has an Earnings ESP of +1.20% and a Zacks Rank of 3.
The Cheesecake Factory Incorporated (CAKE - Free Report) has an Earnings ESP of +1.66% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>