McDonald’s-US vs Dunkin’ Donuts-US – Nasdaq.com

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McDonald’s ( MCD ) is an American chain of quick service restaurants. It operates and franchises McDonald’s restaurants, which serve a locally-relevant menu of quality food and beverages in more than 100 countries. The restaurants offer a substantially uniform menu, although there are geographic variations to suit local consumer preferences and tastes. The restaurants in the U.S. and many international markets also offer a full or limited breakfast menu.

McDonald’s main competitors are other fast food chains. In this analysis we see how McDonald’s Key Operating Metrics compare against Dunkin’ Brands. For detailed analysis with our interactive dashboard – How Does McDonald’s-US Key Operating Metrics Compare With Dunkin’ Brands-US?  In addition, here is more Consumer Discretionary data .

Note: In this analysis for comparison we have only taken Dunkin’ Donuts’-US business of Dunkin’ Brands as the comparison is only against McDonald’s-US business .

How does McDonald’s-US Revenue compare with Dunkin’ Brands?

  • McDonald’s US has seen a fall in revenue in recent years as the re-franchising has been done on a large scale. Revenue fell from $8.3 billion in 2016 to $7.7 billion in 2018. As the re-franchising is nearly complete, Trefis estimates revenue to have a positive growth and be around $8.1 billion in 2019.
  • Dunkin’ Donuts US has seen fluctuating revenues over the past few years. It rose from $608 million in 2016 to $641.9 million in 2017 but fell to $606.8 million in 2018. Trefis estimates a positive growth and revenue to be around $643.9 million in 2019.

McDonald’s & Dunkin’ Brands Revenue can be divided into 2 Key Metrics:

Metric 1: Number of Stores

  • McDonald’s has seen a small fall in Total number of stores in the US primarily due to the re-franchising initiative in which they are targeting 95% of restaurants to be under the franchise model. Number of stores went down from 14.16K in 2016 to 13.91K in 2018. As the re-franchising is nearly complete, Trefis estimates a positive net addition to the stores which would take them to around 14.05K in 2019.
  • Dunkin’ Donuts stores in the US have seen a constant increase from 8.63K in 2016 to 9.28K in 2018. Trefis estimates the expansion trend to continue and stores to be around 9.57K in 2019.

Metric 2: Average Revenue / Franchise Fees Per Restaurant

  • McDonald’s has seen a fall in average revenue in the US primarily due to the re-franchising initiative in which they are targeting 95% of restaurants to be under the franchise model. Average revenue went down from $583K in 2016 to $550.9K in 2018. As the re-franchising is nearly complete, Trefis estimates a positive growth in franchise fees which would take the metric to about $573.4K in 2019.
  • Average franchise fees for Dunkin’ Donuts in the US have been fluctuating over the past few years. The metric increased from $70.5K in 2016 to $71.4K in 2017 but fell to $65.4K in 2018. Trefis estimates a bit of a recovery in 2019 and the metric to be about $67.3K in 2019.

Comparing EBITDA Margin:

  • McDonald’s has seen a continuous rise in its EBITDA margin primarily due to the re-franchising initiative. It increased from 45.7% in 2016 to 60.2% in 2018. In 2019 we expect it to reach around 61.2%.
  • Dunkin’ Donuts-US’s EBITDA margin has been fluctuating over the past few years. The metric increased from 60.7% in 2016 to 62.1% in 2017 but fell to 59.8% in 2018. Trefis estimates a bit of recovery in 2019 and the metric to be about 61.8% in 2019.

Conclusion:

  • While McDonald’s has seen a fall in Revenue and related metrics because of the re-franchising initiative, the same has also resulted in better margins over the last few years. Dunkin’ Donuts US in comparison has had some fluctuating growth over the past couple of years as its average franchise fees and royalty income fell in 2018, which we expect the company to recover in 2019 and onward.
  • Overall, both the companies seem to have strong revenue and margins over the past few years and are expected to continue with the same.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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