Dunkin' Brands Group, Inc. reported healthy revenue growth but profitability was a worry as operating income remained flat. Net revenues for the quarter rose 12.5% to $168.5 million driven by new store openings and higher royalty income due to impressive growth in system-wide sales.

Net income increased $26.8 million to $11.6 million or 10 cents a share. However, excluding one-time items, the company earned a healthy 30 cents a share. Operating income remained flat at $44 million.

Dunkin' Brands competes with McDonald's, Starbucks, Krispy Kreme, Dairy Queen and Cold Stone Creamery to name a few.

See our full analysis of Dunkin' Brands here

Dunkin' Donuts U.S. Leads the Way

Dunkin' Donuts U.S. comparable store sales grew 7.4% driven by higher pricing and the introduction of new sausage sandwiches in partnership with Hillshire Farm. Dunkin' Donuts' U.S. operations constitute more than 60% to the overall stock value as per our estimates. On average, a single Dunkin' Donut store generates a little more than $800,000 revenue annually.

The company also opened 120 new Dunkin' Donuts in the U.S. in the fourth quarter. Dunkin' Brands plans to double the number of Dunkin' Donuts in the U.S. to 14,000 in the next 20 years.

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Similarly, Baskin Robbins International continues to do well with system-wide sales witnessing a 10.9% growth. In fact, the revenue generated from the sale of ice-cream products rose 34% to $26.5 million. Baskin-Robbins International contributes about 27% to the total stock price, as per our estimates.

We estimate a $29 price for Dunkin' Brands, which is in line with the market price. We are in the process of revising our estimates to incorporate Q4 earnings.

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