Reuters report investors hungry for restaurant growth gobbled up shares in Dunkin’ Brands Group Inc (DNKN.O) on its Wednesday debut, betting its popular coffee-and-breakfast chain will outpace rivals like Starbucks Corp (SBUX.O) in U.S. market growth.
Shares in Dunkin’ Brands jumped as much as 56 percent on their first day of trading and closed at $27.85 — a gain of 47 percent.
The company’s unpretentious Dunkin’ Donuts brand drives its growth, has devoted fans and has plenty of room for domestic expansion, particularly west of the Mississippi River.
But some analysts warn that bitter competition looms in the coffee and other beverage business that accounts for 60 percent of revenue at Dunkin’ Donuts.
“It’s soon to be a battle for share as opposed to taking advantage of a growth market,” said Bob Goldin, executive vice president at food consulting firm Technomic.
Read more at: Reuters