Dunkin' Brands Group, Inc. DNKN might be in for a slow start to 2015. The harsh winter toward the end of 2014 in New York and Boston, where the company enjoys enormous popularity, might dampen its earnings in the first quarter.
The coffee and doughnut chain operated 8,082 U.S. restaurants, as of December-end, out of which around 4,030 are located in the Northeast. A large number of the stores are in Pennsylvania, northern Michigan and other areas which were hit by the harsh winter.
Analysts predict that the record snowfall in the U.S. Northeast region last winter could hurt Dunkin Brands’ comps by 1% to 1.6%. Most believe that the inclement weather lowered customer footfalls at the restaurants.
Dunkin Donuts — the most popular national chain in New York City, according to American public policy think tank Center for an Urban Future — might be particularly hurt by the harsh winter in Boston. Major snow storms forced road closures and stalled public transit in the region.
Weather will have an impact on the U.S. economy as financial giant Goldman Sachs Group, Inc. slashed its first-quarter Gross Domestic Product outlook by 20 basis points in February. However, for Dunkin' Donuts, the effect might be just a bit more widespread.
Further, the negative impact of the bad winter will affect the company’s ice cream chain — Baskin Robbins. The ice cream chain has a larger presence in the West Coast, but the unusually cold winter might have reduced consumer appetite for ice cream even in areas where snowfall was lesser.
Dunkin' Brands is scheduled to report its first quarter 2015 earnings on April 23, 2015. The Earnings ESP for the company stands at 0.00%.
Dunkin' Brands currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Darden Restaurants, Inc. DRI, Cracker Barrel Old Country Store, Inc. CBRL and Sonic Corp. SONC. All these stocks sport a Zacks Rank #1 (Strong Buy).
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