SBUX - Why Dunkin' Brands Closing 450 Stores is Good News for Investors
It's hard to ignore when a restaurant announces the closing of hundreds of stores. With Dunkin' Brands Group (NASDAQ: DNKN) closing 450 stores inside of Speedway locations, investors might be tempted to view this as though Dunkin' can't afford all of its locations. The fact that Dunkin' Brands suspended its dividend to save cash would seem to reinforce this theory.
However, the long-term story for Dunkin' has never been stronger. Investors would be wise to use the recent downdraft as an opportunity to buy the shares.
Both Dunkin' and Starbucks (NASDAQ: SBUX) are planning on closing hundreds of stores this year, but for different reasons. According to Dunkin', the locations being closed are "lower volume units" that represent less than 0.5% of its U.S. annual systemwide sales. By comparison, Starbucks plans to close around 400 company-owned locations over the next year and a half.