Domino's Pizza Earnings Beat But Earnings, Miss Comps

Domino's Pizza (DPZ) has posted better-than-expected earnings for the third quarter, but sales figures and same-store sales have just missed estimates, dropping the shares on Tuesday morning.

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Domino's Pizza Gains

estimates: Wall Street expects a profit of $ 1.73 per share for Domino, according to Zacks Investment Research. Revenues increased 23% to $ 790 million. Consensus Metrix expects same-store sales growth of 6.5%.

Results: Domino & # 39; s Pizza earnings were $ 1.95 per share for sales of $ 786 million. National sales by store increased by 6.3%, the company's sales by 4.9% and franchises by 6.4%. International sales increased 3.3% excluding currency effects.

"Our US business once again reached extremely high levels in the third quarter," said CEO Ritch Allison. "Our global business, driven by strong growth in retail sales and economic data from franchisees that outperformed the sector, continued its momentum."

Domino Pizza Stock

Shares fell 4.6% to 260.51 in morning trading on the stock market today. Domino & # 39; s Pizza shares were working on a 305.44 point buy point from a six-week flat-based MarketSmith analysis. This is part of a base based pattern.

Domino & # 39; s relative strength, which tracks the performance of an action against the S & P 500 index, is not far from new heights.

The stock has excellent fundamentals, as evidenced by its IBD composite rating of 95. In addition, it ranks fifth in the competitive Retail-Restaurants group.

Domino can also benefit from Papa Johns (PZZA) between the board of directors and John Schnatter, its founder and principal shareholder. Papa John's stock was not active early, but the trend has been trending down since the end of 2016.

How Analysts Trench Domino's Pizza

Wells Fargo analyst Jon Tower, who attributes the market's performance to the stock, has been cautious about Domino's earnings. Domino shares are trading above its target price of 260.

"We continue to believe that DPZ shares deserve a higher valuation than their peers in the fast-track segment … given the long-term growth of system-wide business turnover and of growth in the number of HSD franchisees, we fear downward bias in the short term, especially if key indicators (such as the US SSS, overall growth) do not meet relatively high expectations, "he said. stated in a research note.

However, Will Slabaugh, an analyst at Stephens, believes the action is overweight with a course goal of 310. He credits the company's success to his Mix and Match menu, to his platform's ability to generate additional sales and its loyalty program Piece of the Pie.

"We continue to believe that DPZ's fundamentals will maintain / widen its industry gap and support its premium valuation," he said in a research note.

Slabaugh expects a 6.5% increase in same-store national sales and adjusted EPS of $ 1.78.

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