Shares of Domino’s Pizza (DPZ) are up more than 3% in pre-market trading at the time of writing. The pizza chain missed second-quarter earnings estimates, and sales were in line with consensus expectations. However, a 3.4% year-over-year increase in U.S. same-store sales growth pushed the shares higher. International same-store sales also grew by 2.4% (excluding forex) compared to Q2FY24. For reference, analysts had forecast U.S. same-store sales growth of 2% and International same-store sales growth of 1.8%.
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Commenting on the results, CEO Russell Weiner stated, “Internationally, we continued to grow despite macro challenges. In the U.S., both delivery and carryout grew, driving meaningful market share gains within the U.S. pizza QSR category.”
Here’s How Domino’s Performed in Q2FY25
The company’s diluted earnings per share (EPS) of $3.81 fell short of analyst expectations of $3.94 and was also lower than the Q2FY24 figure of $4.03. Meanwhile, revenue rose 4.3% year-over-year to $1.15 billion, which came in line with consensus estimates. Domino’s Pizza’s global retail sales jumped 5.6% (excluding forex) compared to the prior year period.
Despite macroeconomic challenges such as inflation and recessionary pressures, Domino’s managed to boost its U.S. sales by sustaining low prices and delivering better value for money than its rivals. The company has also listed its menu on third-party apps like DoorDash (DASH) and Uber Eats (UBER), allowing customers to place orders online while Domino’s own drivers handle deliveries, leveraging the strengths of both platforms.
Domino’s bottom line took a hit from a $27.4 million loss related to its investment in DPC Dash, the exclusive master franchisee for Domino’s Pizza in mainland China, Hong Kong, and Macau, as well as by higher income taxes.
The company’s board declared a regular quarterly dividend of $1.74 per share, reflecting an above-industry-average yield of 1.72%. During the quarter, DPZ repurchased $150 million worth of its common shares, leaving $614.3 million remaining under the current stock buyback program.
Is DPZ Stock a Buy?
On TipRanks, DPZ stock has a Moderate Buy consensus rating based on 15 Buys, nine Holds, and two Sell ratings. Also, the average Domino’s Pizza price target of $507.26 implies 8.9% upside potential from current levels. Year-to-date, DPZ stock has gained nearly 12%.
Please note that these ratings were given before the Q2 results and are subject to change once analysts revise their recommendations.
