Dunkin Brands Group Inc (NASDAQ:DNKN) has released Q4 results today. All four of its business segments enjoyed positive comparable store sales. In my view, this shows that its overall strategy is working well.
Dunkin Donuts US comparable store sales growth in Q4 was 0.8%. Meanwhile, Baskin-Robbins recorded a rise in US comparable store sales of 5.1%. These figures were achieved at a time of further expansion for the company, with 141 new restaurants added across the globe. Further increases could be ahead, and this could prove to be a significant catalyst for the company in the long run in my view.
During the full year, revenues increased by 3.8%. This meant that diluted adjusted EPS increased by 7.5% versus the prior year to $2.43. Driving this growth forward was morning comparable store sales, which increased each quarter sequentially. The company also enjoyed its highest quarterly beverage comparable sales of the year in Q4, which was driven by iced coffee.
Dunkin Donuts continues to add members to its loyalty program, which brings its total membership to 8 million. A simplified menu has also been tested across part of its estate and it is hoped that it will improve franchisees’ profitability when it is rolled out nationally by the end of Q1 2019.
In my opinion, Dunkin Donuts is making good progress with the implementation of its strategy. Its increasing number of restaurants coupled with strong performance in its morning comparables show that it continues to offer further growth prospects in the long term. The change in menu could also have a positive impact in the near term on profitability, while its loyalty program may create additional growth opportunities.
With the prospects for the food industry being generally positive and with wage growth having the potential to return, I’m upbeat about the company’s investment outlook. Therefore, I think its shares could perform relatively well in future.