Investors Should Consider Dunkin' Brands

The restaurant industry is anticipated to grow at a CAGR of 7.2% in the next 3 years. In 2011, total revenues were $2,457.1 billion and this is expected to reach $3,482.5 billion by the end of 2016. This growth is mainly due to the fact that the demand for food is rising with the population growth globally. The changing lifestyles of working professionals has also increased the traffic of restaurants. Restaurants are now constantly experimenting with new menus in order to achieve a larger customer base. As mobile apps become more popular, the marketing strategy is more focused on the internet marketing and online order-processing systems.

Dunkin' Brands(DNKN) is a common name among those fond of baked food, ice creams, and coffee. The company operates in 60 countries with more than 18,000 outlets spread across the globe. The company primarily operates through its two prime brands, Dunkin' Donuts and Baskin-Robbins.

Quarter overview

The company recently posted its second quarter results. Revenue increased, but did not reach management's expectations. The consolidated revenue grew 4.6% year-over-year to $190 million, compared to $182.5 million in the same quarter last year. Growth in revenue was due to the increased royalty income resulting from system wide sales boost.

The revenue growth had direct impact on the operating income of the company. Operating income increased by 14%, to record $10.8 million. Adjusted operating income gained 3.3% year over year, to record $3 million. The increase in revenue and the operating income was mainly due the growth in sales of all company-owned restaurant chains in the Atlanta market.

The bottom line for the quarter also grew by 13.2% to $5.4 million. The company saved $3.4 million on interest burden which had a strong impact on the growth of the bottom line, partly offset by increase in the income tax of $9.2 million.

Diluted EPS also witnessed a growth by 14.6% year-over-year to $0.47, compared to $0.41 in the same period last year. The share repurchase program had an impact on the EPS, as the company repurchased 1,260,000 shares in the second quarter, reducing the shares outstanding.

New outlets

Dunkin' Brands expanded its global outlet count by 151.

Sno	Brand	New Outlet
01	Dunkin' Donuts U.S. locations,	75
02	Dunkin' Donuts International locations	17
03	Baskin-Robbins U.S. locations	12
04	Baskin-Robbins International locations	47

Statistics that influence future growth

The bottom line of any company is influenced mainly by the expenses incurred in generating revenue. Dunkin' Donuts' expenses are mainly administrative, food inventory, and infrastructure costs. Administrative cost was down by 4% to record $56 million; this is 30% of total sales. In the same quarter last year, total administrative cost was $64 million, or 34% of total revenue. Infrastructure costs remained flat since most of the lease agreements are long term.

Journey Ahead

The company has lowered its guidance for the fiscal year. 

Comparable stores sales for Dunkin' Donuts is anticipated to grow by 2-3%, down from the earlier estimate of 3-4%, while Baskin Robbins expects to record growth between 1-3%. The company plans to open about 685 to 800 new locations globally. The company anticipates revenue growth between 6

Here’s More on Apple’s Long-Awaited Gadget

The global tech giant Apple (AAPL) is about to launch the most awaited smartphone of the season, the iPhone 6, and the long wait of the gizmo geeks shall end by this September. The upcoming iPhone is expected to have much more new and interesting features, thus attracting the attention of gadget addicts.

Reality or Rumor?

The new iPhone is predicted to have a larger display, in the range of 4.8 inches to 5.5 inches, with 1136x640 pixel resolution. In fact, there is lot of buzz that this year too Apple might launch more than one iPhone just like it did last year in the case of iPhone 5S and iPhone 5C.

The price range of the device is not yet confirmed but it is guessed that the contract-free version might cost around $549 for the 16GB, and $649 for 32GB. Rumors have it that the iPhone will have iOS8 which the Cupertino company is expected to release at the Worldwide Developer Conference scheduled in June. The latest feature in iPhone 6 will be the NFC chip which is a big attraction point for several buyers that will help make things such as mobile payments or making phone calls much easier.

Apple has always provided good storage internal capacity in the iPhones which till now has had a maximum limit of up to 64GB. But this time it has broken all records and set the limit up to 128GB expandable memory, just like that for iPad Air. This new limit for the storage is a boon for music and video addicts who may download and capture more than before.

What's New?

The introduction of sapphire screen in the new iPhone 6 is till now the best feature used. The screen is manufactured by melting aluminum oxide in specialized furnaces. When liquid aluminum oxide is allowed to cool slowly, it forms a large crystal. The sapphire crystal is cut out to form screens. Apple has signed a contract of $578 million with GT Advanced, the sapphire screen company. Rumor goes around that solar charging screens might be used in iPhone 6, but this looks far-fetched as the technology is yet to be released.

Apple is integrating heart rate and blood pressure monitors in the earpods of the headphone. Biggest rival Samsung (SSNLF) had released heart beat monitors at the back of their new smartphone Galaxy S5. It might also provide a slot for expandable storage. Flexible screen and wireless charging are the new features which the rival companies have already adopted but we are not sure yet that these feature will be found in the iPhone 6 or not.

Conclusion

The new iPhone will definitely have new and exciting features that will surely grab the attention of people worldwide and Apple loyalists are eagerly waiting for the launch of this new phone. With distinctive features such as the sapphire screen and the 128 GB memory it is sure to beat the records of all the other smartphones. Analysts are even predicting that the launch of the device will have a positive effect on the share price.

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NBC is developing a reality show with Virgin Galactic

  Virgin Galactic's SpaceShipTwo crashes NEW YORK (CNNMoney) NBC is developing a reality TV series called "Space Race" with Virgin Galactic, whose SpaceShipTwo exploded on Friday.

The network declined to comment. But according to Deadline, NBC is now "gathering information on the situation" regarding the reality series.

During a test flight, a "serious anomaly" caused Virgin's commercial space craft to explode over the Mojave Desert, killing one and seriously injuring another.

The show -- which was announced last year -- is an exclusive series between NBC, Virgin founder Richard Branson and reality TV super-producer Mark Burnett.

NBC described the show as an elimination competition in which normal people would compete with one another for "the ultimate prize" -- a flight into space on Virgin Galactic's SpaceShipTwo.

The series would also have "unprecedented access" to Virgin Galactic's Spaceport America facilities in New Mexico, where contestants would train for their winning flight, according to a press release issued last year.

Virgin Galactic's plan for the $500 million spaceship is to transport passengers 62 miles above Earth where the planet meets the onset of space.

The flight reportedly would cost guests upward of $250,000 and celebrities like Leonardo DiCaprio and Stephen Hawking have signed up for tickets.

For Burnett -- the producer behind reality hits like "Survivor" -- "Space Race" is another attempt to accomplish his dream of using a TV show to send everyday people into space.

"I am thrilled to be part of a series that will give the everyday person a chance to see space," Burnett said last year. "NBC has come on board ... so that viewers at home will have a first class seat."