Dunkin' Brands is looking at bolstering afternoon sales of coffee and doughnuts to perk up its sales in 2018.
On Thursday, the company revealed a detailed blueprint for growth over the next three years during its Investor and Analyst Day at Fenway Park in Boston, with a focus on quality, convenience and speed.
Dunkin' has been pressured by competitors such as McDonald's, Burger King and Starbucks, to make itself known for more than just its doughnuts.
The company has been making major changes in the last few months, ramping up its digital ordering, slowing down its expansion plans and slimming down its menu to refocus its efforts on being a beverage-led brand.
Here's Dunkin's forecast for growth in 2018:
- Dunkin' expects same-store sales to increase 1 percent in 2018.
- Open more than 275 new new locations in the U.S.
- Adjusted earnings of $2.40 to $2.45 per share.
- Low- to mid-single-digit percent revenue growth.
"2018 will look a lot like 2017 in terms of performance," David Hoffmann, president of Dunkin' Donuts U.S., said at the Investor Day.
Hoffmann said Dunkin' is laying the foundation in 2018 for future growth by simplifying its menu, creating a new store design and refreshing its branding.
The company also unveiled its targets for 2020. It expects:
- Same-store sales growth in the low single digits that could accelerate to 3 percent.
- Open about 1,000 net new Dunkin' locations by the end of 2020.
- Low-single-digit growth in same-store sales at Baskin-Robbins.
- Low- to mid-single-digit percent revenue growth.
While the company is still focused on morning sales that occur before 11 a.m., it's also working to unlock growth during the afternoon. Dunkin' plans to extend its premium tea and frozen beverage lines as well as introduce more espresso products.
In addition, Dunkin' will continue its value offers of two Egg and Cheese Wake-up Wraps for $2 and $2 medium iced or hot lattes from 2 p.m. to 6 p.m to drive traffic in the evening.
The brand slimmed down its menu in 2017, but will continue to launch new breakfast sandwiches in 2018. Dunkin' cut 10 percent of its national menu as well as a 23 items that were available on some menu boards in the U.S.
The company said customers can expect more flavored bacon sandwiches like its Sweet Black Pepper Bacon Breakfast Sandwich to appear on the menu this year.
Other menu innovations coming down the pipeline include Brown Sugar Cold Brew, Deluxe creme-filled Munchkins, and Frozen and Iced Lemonade.
(Source: Dunkin' Brands)
Several doughnuts were also cut from Dunkin's menu boards last year. The company plans to continue to offer seasonal treats, like heart-shaped doughnuts for Valentine's Day, alongside its traditional 12 best-selling doughnuts.
In addition to menu changes, the company is launching a new store design to make ordering at its restaurants simpler and faster for customers.
In 2018, the company is set to open 275 net new stores in the U.S., with plans to open 1,000 net new locations by the end of 2020. Hoffmann said 90 percent of these openings will be built outside of the Northeast, its most highly saturated area.
(Source: Dunkin' Brands)
(Source: Dunkin' Brands)
Dunkin' said that 75 percent of all new restaurants will have a drive-thru lane, as restaurants with drive-thrus have 40 percent higher sales volume than non-drive-thru locations. In addition, the company plans to expand the mobile order drive-thru line it debuted at its concept store in Quincy, Massachusetts, in January. It did not specify how many locations would have these lines.
Hoffmann said that Dunkin' will be doing twice as many remodels as new store openings, with the majority of the focus on locations in the Northeast.