Here’s What We Are Watching For In Dunkin’ Brands Q2 2017 Earnings
Dunkin’ Brands (NASDAQ:DNKN) is scheduled to announce its Q2 2017 earnings on July 27th and after disappointing comparable sales for Q1 2017, we will be keenly watching same store sales growth in this quarter. The company also missed analyst expectations for revenues in Q1 2017 due to declining traffic. Analysts expect Q2 2017 to be better than the same period in the previous year and below is a summary of consensus revenue estimates for the company:
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Source: Yahoo Finance
In a challenging industry environment with growing competition, we would be watching if Dunkin’ is able to meet these expectations and more importantly if the company has succeeded in increasing store traffic in Q2 2017.
As per data analyzed by BlackBox Intelligence, the restaurant industry has been “cautiously optimistic” in Q2 2017. While comp sales and traffic growth have remained negative throughout the quarter, June sales were best for the industry for both these metrics in the past six months.
Higher job and economic growth and moderating credit growth should help the restaurant industry going forward. Fine dining and upscale casual were the best performing restaurant segments in Q2 2017. Fast casual restaurants have been the weakest performing segment and the quick service segment is also struggling to grow.
Dunkin’ Brands has a strategic plan in place for future growth and despite flat comparable sales in Q1 2017, the company is confident of meeting its comparable sales growth guidance for 2017. A streamlined menu, product innovation and brand differentiation, stronger relationship with franchisees, and digital initiatives are the four key pillars of its growth plan. (Read A Closer Look At Dunkin’ Brands Growth Strategy)
To further its menu innovation initiatives, the company introduced frozen coffee in May this year and it would be interesting to watch if this has succeeded in driving traffic for Dunkin’ Brands. (Read Dunkin Donuts Introduces Frozen Coffee: Can Menu Innovation Drive Sales?)
The company is also expanding home delivery for its Baskin-Robbins brand and this increased convenience can help it capture a larger market share in the home ice-cream consumption segment in the long term. (Read Here’s How Dunkin’ Brands Can Benefit By Expanding Home Delivery For Baskin-Robbins).
We would be closely watching Dunkin’ Brands comparable sales growth for Q2 2017 as the company navigates through a challenging environment to see if it can deliver results based on its strategic growth plan.
For more details See full analysis for Dunkin’ Brands
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