Mideast could help drive Dunkin' to $29
Saudi Arabia, Bahrain, Qatar, U.A.E and Kuwait are all high-income economies, and some are growing faster than those of BRIC countries.
A disappointing domestic performance by Baskin-Robbins is also prompting the company to look eastward for growth. There are about 4,000 Baskin-Robbins outlets internationally and revenues from this segment grew more than 10% year over year last quarter. Dunkin Brands competes with McDonald's (MCD), Starbucks (SBUX), Krispy Kreme, Dairy Queen and Cold Stone Creamery to name a few.
The rising Middle East
Like most major food and beverage companies, Dunkin' Brands has vast presence in the emerging economies of Brazil, Russia, India and China as rising disposable income and adoption of western lifestyle offer tremendous opportunity to grow. Moreover, as those markets are underpenetrated, they offer huge potential for expansion. The growth prospects of BRIC nations, however, often overshadow the importance of another major market for Baskin-Robbin, which is The Middle East.
The Middle East's perennial hot climate ensures year-round demand for ice cream and dessert. The company has presence in Saudi Arabia, Bahrain, Qatar, U.A.E and Kuwait. All of those countries are high-income economies, some of which are growing at rates faster than those for BRIC countries. Qatar grew at a jaw-dropping 20% last year, while Bahrain grew at 7%. Dunkin' Donuts opened its first cafe-style restaurant in the Middle East back in 2009, and the premium menu offerings fetch higher margins.
Given the strong growth prospects, Dunkin' Donuts plans to open 25 outlets in the Middle East by next year.
We believe Baskin-Robbins' international segment contributes 27% to the Trefis price estimate for DNKN stock. We estimate the number of outlets will increase from the current 4,000 to about 5,000 by 2014. The company also opened its first store in Singapore earlier this year. Apart from the U.S., Baskin-Robbins also has wide presence in Japan, South Korea, Thailand, the U.K. and Canada.
We estimate a $29 price for Dunkin' Brands, which is more than 16% above the market price.
Am I reading this right? Dunkin Donuts, who refused to sell me a franchise because they said they weren't interested in the southern California market, have stores in Brazil, Russia, China, India, and now the Middle East?
WTF, Dunkin Donuts!
I still say screw Starbucks, support your local coffee shops.
I used to be a huge fan of D&D when I lived in Michigan. I moved to California for several years, then moved to D.C. and found the quality to vary widely by store. It seems that they relaxed their standards, allowing the owners to make their doughnuts however they seemed fit. Even the color of their chocolate filling would vary from light brown to dark.
D&D used to have strict freshness standards too, but I would often get a doughnut that was stale and dried out in D.C.
I read an article around that time that suggested finding new owners was becoming more difficut for them. I suspect the feared upsetting the few people still willing to open a store by pushing them too much. It's a shame, since I think Dunkin' Donuts was one of the last great national brands still left. Now it's a crap shoot.
I wish they'd open one in Reno, but only if they insist on high standards.
I think they should move west... to California. We are stuck with their coupons in our mailbox and ads on our tv.
I'm shocked to read through these posts to find that DD does NOT have as much a presence in the rest of the US. Freely admit it's ignorance on my part, just assumed that DD were a national brand and that they had stores...well....nationally. With all the other things to worry about I never would have imagined for a mintue that they weren't present at all in many states nationally.
Here where I live in NY/NJ there's one every few blocks or so. Geez I have two within a few minutes of me, one to the left and one to the right. I'm not kidding in the tri-state area and much of New Jersey too, there are soooooooo many it's not funny. God you guys living on the west coast must hate us here in NY/NJ and I can't blame ya because there seems to be no rhyme or reason to any of it.
I'm actually ashamed that there's not one in the entire state of CA. How could that be? Some gentlemen on here said he wanted to open up one in CA but they denied him. Why? Isn't it good business that people want to buy from them and open up stores? Who are they to say "we don't want stores in this state or that state?" You go to them and say "I want to own one of your franchises" what do they care exactly where you choose to open one? That part I'm a little foggy about, seems like discrimination to me. Is it really up to them to specify where you can and can't open up a store of your own?
I'm glad that I read through most of these, now I know if I ever move from NY what I'm in for. Dunkin Donuts is not what it used to be but it's still the best coffee around. The Donuts themselves are nothing special but I like their flatbreads etc. For the life of me I just don't understand aside from NY & NJ and much of the east coast why they're so scarce everywhere else in the US. Seems to me if you're interested in owning & opening one then you should be allowed to.....wherever you like. Just saying.
It's a damn shame they are no longer on the freaking WEST coast. YOU CAN NOT FIND ONE DAMN STORE IN LOS ANGELES. Oh there were a bunch at one point now there are Zilch. Why not come back and give us a try again?
I am so sure a lot of people would love having them back VS those DAMN Yumm Yumm Donuts shops (YUCK!)
Why complain I think the east coast has it made having them around.
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