Domino's (DPZ) Outpaces Industry in the Past 6 Months: Here's Why

Asia's Tech News Daily

The restaurant industry has been grappling with traffic decline over the past six months. However, shares of Domino’s Pizza, Inc. DPZ have surged 22.2% in the same time frame, against the industry’s decline of 3.1%. The company has been benefiting from a solid digital ordering system and higher global retail sales. This along with focus on robust international expansion bodes well. However, coronavirus woes and high debt remain concerns. Let’s delve deeper.

Click to get this free report, Zacks Investment Research

– Zacks

Factors Driving Growth

Domino’s continues to benefit from high digital ordering. During the second quarter of 2020, the company-initiated car-side delivery, thus enabling convenient and contact-free carryout experience for its customers. During the third quarter fiscal 2021, the company made substantial progress regarding its Carside Delivery. With consistent waiting time averaging below two minutes, franchisees and operators have enthusiastically embraced this new service method. It was also successful in bringing in new customers. During the quarter, the company initiated a pilot version of its new Pulse point-of-sale system to bolster the productivity of its stores. Given the ongoing development and evolution of the product, further investments in this direction are likely.

Meanwhile, the company’s international growth continues to be strong and diversified across markets, courtesy of exceptional unit level economics. Third-quarter fiscal 2021 marked the 111th consecutive quarter of positive same-store sales in its international business. Improvement in comps can be attributed to ticket growth. This was driven by the return of non-delivery service methods, the resumption of normal store hours and the reopening of international stores (that were closed in the prior-year quarter). Meanwhile, the company inaugurated 323 (45 net U.S. stores and 278 net new international stores) global net store openings during third-quarter fiscal 2021.

During the fiscal third quarter, the company accelerated the pace of global store growth on a trailing four-quarter basis. It has opened 1124 net new stores, which shows an increase of 500 from fourth-quarter 2020. Solid store openings were witnessed in India, with the count rising to 1400. The company initiated its 93rd international market with a store opening in Lithuania. Going forward, the company is confident about its two to three-year outlook of 6% to 8% annual global net store growth.

The Zacks Rank #3 (Hold) company continues to impress investors with robust margin growth. In third-quarter fiscal 2021, the company’s operating margin expanded 120 basis points (bps) year over year to 38.6% compared with 37.4% in the prior-year period. Operating margin expansion was primarily driven by an increase in revenues in its global franchise business. Net income margin for the quarter was 12.1%, up 190 bps from the prior-year level. However, company-owned store margin (as a percentage of revenues) was flat year over year at 19.8%.

Click to get this free report, Zacks Investment Research
Image Source: Zacks Investment Research

Concerns

At the end of third-quarter fiscal 2021, fewer than 175 stores (majority located in India and New Zealand) were temporarily shut due to the pandemic. During the quarter, COVID-19 continues to have a significant impact on several of the company’s international markets. The company announced that coronavirus pandemic will continue to hurt international markets for the upcoming quarters.

Managing liquidity has become a herculean task during the coronavirus pandemic. Long-term debt, as of Sep 12, 2021, was $5 billion, almost flat sequentially. The company ended the fiscal third quarter with cash and cash equivalent of $295.4 million compared with $292.1 million in the previous quarter. Although cash and cash equivalent has increased sequentially, it might still be difficult to manage a high debt level.

Key Restaurant Picks

Papa John’s International, Inc. PZZA currently carries a Zacks Rank #2 (Buy). The company has been benefiting from its off-premise business model. Sales at off-premise business model has exceeded pre-pandemic levels. We believe that a rise in customer count coupled with targeted off-premise marketing are likely to drive the channel’s performance in the days ahead.

Papa John’s has reported better-than-expected earnings in three of the trailing four quarters, the average surprise being 27.2%. The company’s fiscal 2021 earnings is likely to witness growth of 138.6%. PZZA stock has gained 48.2% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Del Taco Restaurants, Inc. TACO has a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 25.7%, on average. Shares of the company have gained 3.3% in the past three months.

The Zacks Consensus Estimate for Del Taco Restaurants’ current financial year sales and earnings per share suggests improvement of 7.2% and 33.3%, respectively, from the year-ago period.

Kura Sushi USA, Inc. KRUS carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 15.6%, on average. Shares of the company have soared 225.1% in the past year.

The Zacks Consensus Estimate for Kura Sushi’s current financial-year sales and EPS suggests growth of 108% and 85.7%, respectively, from the year-ago period’s levels.


Zacks’ Top Picks to Cash in on Artificial Intelligence

In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create “the world’s first trillionaires.” Zacks’ urgent special report reveals 3 AI picks investors need to know about today.

See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

Domino’s Pizza Inc (DPZ): Free Stock Analysis Report

 

Papa John’s International, Inc. (PZZA): Free Stock Analysis Report

 

Del Taco Restaurants, Inc. (TACO): Free Stock Analysis Report

 

Kura Sushi USA, Inc. (KRUS): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

3 Reasons Growth Investors Will Love ArcBest (ARCB)

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market’s attention and produce exceptional returns. However, it isn’t easy to find a ... Read more »

Why the Earnings Surprise Streak Could Continue for Huntsman (HUN)

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly ... Read more »

Is Advanced Micro (AMD) a Solid Growth Stock? 3 Reasons to Think " Yes "

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market’s attention and produce exceptional returns. But finding a great growth stock is ... Read more »

Why Ovintiv (OVV) Could Beat Earnings Estimates Again

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly ... Read more »

Earnings Estimates Moving Higher for Caleres Inc. (CAL): Time to Buy?

Investors might want to bet on Caleres Inc. (CAL), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, ... Read more »

Looking for a Growth Stock? 3 Reasons Why AMN Healthcare (AMN) is a Solid Choice

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market’s attention and deliver solid returns. But finding a growth stock ... Read more »

Why Expeditors International (EXPD) Could Beat Earnings Estimates Again

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Expeditors International (EXPD), which ... Read more »

Why Group 1 Automotive (GPI) Could Beat Earnings Estimates Again

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly ... Read more »

Cat And Mouse – As Scammers Step Up Their Game, Crypto Security Must Keep Pace

Leading blockchain security firm Chainalysis recently released the first glimpse of its 2022 Crypto Crime Reports, and although there are some signs of progress, it makes for sober reading. In ... Read more »

How to Build True Resilience Amid a Changing Business Landscape

The concept of resilience, as it applies to both organizations and individuals, has evolved significantly in recent years. The term that once referred to the ability to withstand sudden change ... Read more »

How to Develop Lifelong Clients

According to a survey of businesses conducted by the consulting company Invesp (which specializes in conversion rate optimization), it costs five times more to obtain new clients as it does ... Read more »

5 Innovative Global Initiatives to Invest In

When most people envision investors’ portfolios, they picture lists of stocks, annuities, and bonds. Yet investing can go far beyond those vehicles. Many people decide to grow and share their ... Read more »

Mastercard (MA) Ties Up to Accelerate B2B Payments in Canada

Mastercard Incorporated MA recently collaborated with BMO Financial Group, a financial services provider, and Moneris Solutions Corporation, a payment solutions provider. Through the partnership with the two Canada-based companies, MA’s ... Read more »

This is Why Hormel Foods (HRL) is a Great Dividend Stock

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor’s dream. But for income investors, generating consistent cash flow ... Read more »

Reasons to Hold on to Montrose Environmental (MEG) Stock

Montrose Environmental Group, Inc. MEG has had an impressive run on the bourse over the past year. The stock returned 34.1% over the past year against 8.2% decline of the ... Read more »

Why Emerson Electric (EMR) is a Top Dividend Stock for Your Portfolio

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor’s dream. But for income investors, generating consistent cash flow ... Read more »

Vail Resorts (MTN) Reports Ski Season Metrics, Skier Visits Down

Vail Resorts, Inc. MTN reported certain ski season metrics for the period from the beginning of the ski season through Jan 2, 2022. – Zacks Ski Season Metrics Season-to-date (through ... Read more »

What's in the Offing for Citizens (CFG) in Q4 Earnings?

Citizens Financial Group CFG is scheduled to report fourth-quarter and 2021 results on Jan 19, before the opening bell. While its quarterly earnings are expected to have improved year over year, ... Read more »

10 Secret Ways To Find The Best Penny Stocks To Buy In 2022

Penny stocks are high-risk, high-reward investments. If you’re looking to take a risk on the stock market to make some serious money, then penny stocks might be for you. However, ... Read more »

Key Factors to Affect M&T Bank (MTB) This Earnings Season

M&T Bank Corporation MTB is scheduled to report fourth-quarter and 2021 results on Jan 20, before the opening bell. The company’s revenues and earnings are expected to have decreased year over ... Read more »

3 Franklin Templeton Mutual Funds for a Steady Portfolio

Founded in 1947, Franklin Templeton Investments prides itself in offering “exceptional asset management” to its clients in more than 165 nations. It has offices in more than 30 countries and ... Read more »

Can Travelers (TRV) Retain Its Surprise Streak in Q4 Earnings?

The Travelers Companies, Inc. TRV is set to report fourth-quarter 2021 earnings on Jan 20. The company delivered an earnings surprise in each of the reported quarters of 2021. – ... Read more »

Smart Money Podcast: How Nerds Choose the Best, and Paying for College

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. NerdWallet – NerdWallet This week’s episode starts with a discussion about how Nerds choose the best financial ... Read more »

Designer Brands and Bed Bath & Beyond have been highlighted as Zacks Bull and Bear of the Day

For Immediate Release Chicago, IL – January 17, 2022 – Zacks Equity Research shares Designer Brands Inc. DBI as the Bull of the Day, and Bed Bath & Beyond BBBY ... Read more »

Here's Why "Trend" Investors Would Love Betting on Lynas Corp. (LYSDY)

When it comes to short-term investing or trading, they say “the trend is your friend.” And there’s no denying that this is the most profitable strategy. But making sure of ... Read more »

8 Practical Tips for Successfully Launching Your Startup

If you’re looking to launch a startup, there’s no better time than now. The startup world is buzzing with activities and opportunities that have never been available before. However, launching ... Read more »

Why Fast-paced Mover Performance Food (PFGC) Is a Great Choice for Value Investors

Momentum investors typically don’t time the market or “buy low and sell high.” In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, ... Read more »

Looking for a Fast-paced Momentum Stock at a Bargain? Consider Meritage (MTH)

Momentum investing is essentially the opposite of the tried-and-tested Wall Street adage — “buy low and sell high.” Investors following this investing style typically avoid betting on cheap stocks and ... Read more »

Recent Price Trend in Oaktree Specialty Lending (OCSL) is Your Friend, Here's Why

While “the trend is your friend” when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of ... Read more »

How Investors Can Grab Better Returns for Finance Using the Zacks ESP Screener

Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the ... Read more »

Here's Why "Trend" Investors Would Love Betting on CBIZ (CBZ)

While “the trend is your friend” when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of ... Read more »

Best Income Stocks to Buy for January 17th

Here are three stocks with buy rank and strong income characteristics for investors to consider today, January 17th: – Zacks Bridge Investment Group BRDG: This vertically integrated real estate investment ... Read more »

Zacks Industry Outlook Highlights: AMN Healthcare Services, Apollo Medical Holdings, Inc and LifeMD, Inc

For Immediate Release Chicago, IL – January 17, 2022 – Today, Zacks Equity Research discusses AMN Healthcare Services AMN, Apollo Medical Holdings, Inc. AMEH and LifeMD, Inc. LFMD. – Zacks ... Read more »

An Annuity 101 Guide For Non Jargoned Consumers

After returning from the grocery store last week, I went to turn on my laptop. To my dismiss, it was now nothing more than a paperweight. In other words, it ... Read more »

How to Boost Your Portfolio with Top Oils and Energy Stocks Set to Beat Earnings

Wall Street watches a company’s quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands ... Read more »

Walmart Might Soon Be Rolling Out Its Own Cryptocurrency

The high demand for and success of NFTs in the crypto world and digital marketplace make it unlikely that the craze will be going away anytime soon. Bloomberg | Getty ... Read more »

Here's How Investors Can Find Strong Utilities Stocks with the Zacks ESP Screener

Two factors often determine stock prices in the long run: earnings and interest rates. Investors can’t control the latter, but they can focus on a company’s earnings results every quarter. ... Read more »

Best Value Stocks to Buy for January 17th

Here are three stocks with buy rank and strong value characteristics for investors to consider today, January 17th: – Zacks Goodyear GT: This one of the largest tire manufacturing companies ... Read more »

Here's What Could Help Stellantis (STLA) Maintain Its Recent Price Strength

While “the trend is your friend” when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of ... Read more »

New Strong Buy Stocks for January 17th

Here are five stocks added to the Zacks Rank #1 (Strong Buy) List today: – Zacks Axis Capital Holdings AXS: This Bermuda-based holding company for the AXIS group of companies ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic