Shares of Domino’s Pizza (DPZ) jumped over 5% in pre-market trading as of this writing on Tuesday after the company reported stronger-than-expected profit and U.S. same-store sales for Q3. The growth was mainly fueled by promotions and new menu items that attracted U.S. consumers looking for affordable dining options.
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The company’s U.S. same-store sales climbed 5.2%, beating the 4.01% growth expected by analysts. Meanwhile, earnings came in at $4.08 per share for the quarter ended September 7, above the expected $3.97.
How Domino’s Got America Ordering Again
U.S. fast-food demand remains under pressure due to stubborn inflation and multiple rounds of menu price hikes, leading consumers to tighten their budgets.
To adapt to this shift, Domino’s brought back its “Best Deal Ever” promotion on August 25, offering any-topping pizzas for $9.99. The chain also expanded its menu with new items like parmesan-stuffed-crust pizza to attract cost-conscious customers.Russell Weiner, Domino’s Chief Executive Officer, said the company saw positive order growth in the U.S. driven by this promotion and the launch of its stuffed-crust pizza.
Other Markets Lag Behind
In the third quarter, Domino’s international same-store sales rose 1.7%, missing estimates of a 1.91% increase, as the company faced uneven demand in key markets such as Japan and Australia.
Overall, revenue for the third quarter climbed 6.2% to $1.15 billion, slightly above analysts’ estimates of $1.14 billion.
Is DPZ a Good Stock to Buy?
Overall, Wall Street has a Moderate Buy consensus rating on Domino’s Pizza stock based on 11 Buys, seven Holds, and one Sell recommendation. The average DPZ stock price target of $503.67 indicates 23.37% upside potential from current levels.
These ratings and price targets will likely change as analysts update their coverage following today’s earnings report.
