Dunkin' Donuts, owned by Dunkin' Brands ( DNKN ), is offering a
limited time autumn menu based on pumpkin and apple flavors. Menu
items such as Apple Orchard Donuts, Apple Crisp
Muffin, Pumpkin Cream Cheese, Pumpkin Muffins will be
offered. Even the K-cups will be made available in the pumpkin
flavor. K-cups have added to the restaurant sales at Dunkin'
Donuts since they were introduced earlier in the year. In the last
quarter, they added 1.5 percentage points to the comparable
sales.
Similarly, the restaurant chain is expanding its breakfast
offerings by adding Quakers Oatmeal to its DDSMART
menu. Dunkin' boasts the DDSMART menu of containing healthier
items and already part of the menu are egg white flatbread
sandwiches, wake-up wraps, small latte lite, freshly brewed teas
and iced teas.
Earlier in the year, the restaurant chain added breakfast
burritos and other items such as Undercover Black Cocoa
Donut , Chocolate Lunarmax Donut and Black Cocoa
Crème Iced Coffee to its menu as well. Adding new menu
items regularly is important for a restaurant to keep increasing
its footfalls. It also serves as a basis to gauge customer
response to certain experimental items which can either be
permanently added to the menu or on the basis of which new items
can be developed.
See full analysis for Dunkin'
Brands
Meanwhile, Expansion Continues
Dunkin' Donuts will add around 100 new restaurants in Texas in
the next several years. Dunkin' Donuts recently signed an agreement
with Jerry Jones Family and Troy Aikman which will see the group
opening up 50 new restaurants throughout the Dallas/Fort Worth area
in the next five years. Similarly, 521 Interest LTD will open up 16
new restaurants in Houston by 2018. All this is part of
Dunkin's strategy to double the number of restaurants in the U.S.
in the next 20 years.
The company still has no presence in California where it is
working on building the infrastructural requirements needed to
support its operations. The western part of the U.S. represents a
significant growth opportunity for Dunkin' since its penetration is
only 1 store for one million people (as of 2011 end). Compare that
to its core market of New England and New York, where its
penetration is 1 store for 10,000 people.
We have a $34 price estimate for Dunkin Brands ,
which is about 15% above the current market price.
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