Dunkin Brands (DNKN) announced on Thursday morning that it has adjusted its sales growth guidance. Here’s what the news means for mutual fund investors.
Inside the News
Shares of Dunkin Brands fell over 8% on Thursday morning after the company announced that it has cut its sales growth outlook for FY2014.
For FY2014, the company now expects to see adjusted EPS between $1.75 and $1.76 per share. Sales growth is expected to be 1.4%, compared to the company’s previous guidance of sales growth between 2% and 3%.
For FY2015, the company expects to see earnings between $1.88 and $1.91 per share. Analysts expect to see earnings of $2.02 per share. Revenue growth is expected to be between 5% and 7%.
Concerns for 2015
In 2014, DNKN shares fell, which could potentially be a concern for 2015 based on the company’s weak outlook. Investors should also consider concerns including increased coffee prices and DNKN’s competition with Starbucks (SBUX).
The stock’s valuation is around 23x 2015 earnings. The reaction to this morning’s news shows that there is little room for error in 2015.
Mutual Funds to Watch
The mutual funds below may be a good option for investors seeking exposure to DNKN. The three funds listed currently hold the largest stakes in the company.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| FCNTX | Fidelity Contrafund | 3.51% |
| PRNHX | T. Rowe Price New Horizons | 2.84% |
| JANDX | Janus D | 2.30% |
The Bottom Line
The funds above offer investors exposure to DNKN, while remaining diversified. Investors interested in DNKN may also be interested in Starbucks (SBUX) or Tim Hortons (THI).
Shares of DNKN are down 12% YTD.