Dunkin' Donuts (NASDAQ:DNKN) is slated to release earnings next Thursday, 7/21, BMO. The street is looking for top line estimates of $219.88 million and bottom line EPS of $.56. I like DNKN's chances of beating estimates here. The largest catalyst for an MRQ earnings beat is the expansion of the Dunkin' Donuts mobile app to include On-the-Go mobile ordering nationwide, a feature which allows customers to order and pay in advance on their phone. Although the mobile app has 18 million+ users, the feature will only be available to the company's 4.6 million DD Perks members since its launch. This app expansion will increase transactions, reduce lines, improve in-store efficiency, and overall be a boost to customer loyalty through growing the DD Perks user base. Some of these tailwinds were surely felt in the last month of the quarter.
Mobile transaction capability is a game changer domestically. In Q1, Starbucks' (NASDAQ:SBUX) mobile app accounted for 21% of all US transactions. Smartphone usage is heavy and only growing. Americans spend, on average, 5 hours per day on their smartphones, equating to roughly 1 out of every 3 waking minutes being spent on the phone. Allowing commerce on a smartphone simply makes it more convenient for consumers to purchase what they want, when they want. DD will get a boost in sales both in the near and long term by making ordering more convenient for the consumer.
