Dunkin' Brands Group (DNKN)

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This company completed an initial public offering (IPO) of its stock in 2010. View articles that reference this company. Recent IPOs:   Globe Specialty Metals   •   LogMeIn   •   Invesco Mortgage Capital   •   Medidata   •   Chemspec

 

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Remi Cossart

Dunkin' Brands Group (NASDAQ:DNKN) runs a series of quick service restaurants (QSR) that sell coffee, baked goods, and ice cream. These products are sold through the Dunkin' Donuts and Baskin-Robbins brands. These stores are meant to be relatively fast delivery with both drive-thru and counter service. Very few of the stores have table service. The company makes the majority of its money through franchise fees and royalties.^[1]

Business Overview

For the full year 2010, Dunkin' Brands' total revenue was $577M. This corresponds to a 7% increase over the $538M announced in 2009. The company reported a net income of $26.9M in 2010 and $35M in 2009.^[2]

New Updates

The company's initial public offering of stock on the NASDAQ occurred on July 26, 2011. The company offered 22.25M shares each for $19. This was above the initial price range of $16-$18. The deal raised a total of $423. The lead underwriters were J P Morgan Chase (JPM), Barclays (BCS), and Morgan Stanley (MS).^[3]

Trends & Forces

Dependence on the Northeast of the US

Approximately 55% of Dunkin's stores are located in New England and New York. The next 43% are located across the east coast, leaving roughly 2% not on the east coast. This massive dependence on Northeastern and Eastern America provides a significant opportunity to the company to expand to the remaining parts of America. If such an expansion is successful the company may be able to enter many largely untapped markets. However, these other markets are not yet proven to be receptive of the Dunkin' chains and may be more difficult to expand into. ^{[4] [5]}

1. ↑ DNKN S-1/A 2011 PROSPECTUS SUMMARY "Our Company" pg 1-2
2. ↑ DNKN S-1/A 2011 PROSPECTUS SUMMARY "Summary consolidated financial and other data" pg 10
3. ↑ Renaissance Capital - IPO Home "Dunkin' Brands raises $423 million after pricing IPO at $19, above the range" 26 July 2011
4. ↑ Seeking Alpha "5 Reasons to Buy Dunkin' Donuts, Not Dunkin' Stock" 1 August 2011
5. ↑ DNKN S-1/A 2011 PROSPECTUS SUMMARY "Continue Dunkin' Donuts US contiguous store expansion" pg 5