Dunkin’ Brands Group Inc. (DNKN, Financial), the parent company of Dunkin’ Donuts and Baskin-Robbins, said on Tuesday the company is ditching the word “Donuts” from its Dunkin’ Donuts brand.
Company stays true to its tagline, yet strives to remain top donut retailer in the U.S.
According to a press release, Dunkin’ Donuts has been a first-class brand among consumers before the introduction of its iconic tagline, “American Runs on Dunkin’.” CEO David Hoffman said the new branding modernizes the Dunkin’ experience for consumers through a wide variety of food and beverages, including coffee, donuts and breakfast items. Chief Marketing Officer Tony Weisman added the new branding presents an opportunity to “create an incredible new energy” to the company while still “paying homage to its heritage.”
Even though the company is dropping the word “Donuts” from its brand name, Dunkin’ is still committed to selling the most popular donuts at each of its store locations. The company reiterated on July 26 its guidance of 275 net new restaurants for fiscal 2018, including 50 NextGen restaurants.
Company has strong profitability in a highly competitive restaurant industry
The restaurant industry is loaded with competition as top chains like McDonald’s Corp. (MCD, Financial), Starbucks Corp. (SBUX, Financial), Yum Brands Inc. (YUM, Financial) and Bill Ackman (Trades, Portfolio)’s Chipotle Mexican Grill Inc. (CMG, Financial) compete on price, range of products and brand recognition.
GuruFocus ranks Dunkin’s profitability 9 out of 10 on several positive investing signs, including a strong Piotroski F-score of 7 and operating margins that have increased approximately 7.9% per year over the past five years. Net profit margins of 32.48% outperform over 98% of global competitors.
Dunkin’ traded 1.33% higher on Tuesday, closing at $73.79 per share. Gurus with large holdings in Dunkin’ include Columbia Wanger (Trades, Portfolio) and Robert Olstein (Trades, Portfolio).
Disclosure: No positions.
