What portion of Dunkin’s strategy translated into revenue?
Overview: Dunkin' Brands Group Inc. 2Q14 earnings (Part 7 of 12)
Revenues
Dunkin’ Brands Group (DNKN) reported $191 million in revenues. This was up 5% from $193 million last year. As discussed earlier, DNKN earns revenues from four segments. Each segment earns revenues from five sources. We’ll look at the segments’ major components in this part of the series.
Five revenue sources
The five revenue sources per segment include:
royalty income
rental income
franchise fees
sales at company-owned restaurant
other revenues
Other revenues include licensing fees, online training fees, other one-time fees, and net refranchising gains.
Dunkin’ Donuts U.S.
This segment reported revenues of $137 million—up 6% compared to $129 million in the same quarter last year. Royalty income contributed 72% to the revenues, or $98 million—up 7% year-over-year (or YoY). Rental income contributed 18% to the revenues, or $27 million—up 2% YoY.
Baskin-Robbins International
This segment reported revenues of $34 million, down 3%—compared to $35 million in the same quarter last year. Royalty income contributed 92% to the revenues, or $30 million—down 3% YoY.
Baskin-Robbins U.S.
This segment reported revenues of $13 million, up 4%—compared to $12.5 million in the same quarter last year. Royalty income contributed 65% to the revenues, or $8 million—up 3% YoY. Other revenues contributed 19% to the revenues, or $2 million—up 8% YoY.
Dunkin’ Donuts International
This segment reported revenues of $5 million, up 15%—compared to $3.9 million in the same quarter last year. Royalty income contributed 85% to the revenues, or $4 million—up 9% YoY.
It’s clear that royalty income is the biggest revenue driver. Royalty income is eventually driven by same-store sales.
To learn more about Dunkin’s peers like Starbucks (SBUX), McDonald’s (MCD) and Yum! Brands (YUM), click on the respective names. All three restaurant chains are a part of the Consumer Discretionary Select Sector SPDR Fund (XLY).
In the next part of the series, we’ll look at Dunkin’s cost and profitability.
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