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Domino's (DPZ) Q4 Earnings & Revenues Lag Estimates, Stock Down
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Domino's Pizza, Inc. (DPZ - Free Report) reported fiscal fourth-quarter 2021 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. The bottom line missed the consensus mark after beating in the preceding three quarters, while the top line lagged the same for the second straight quarter. Following the results, the company’s shares are down 6% in the pre-market trading session.
Ritch Allison, Domino's CEO, said “When we compare our 2021 results back to pre-pandemic 2019, the Domino's brand grew by nearly $3.5 billion in global retail sales over the last two years. Looking forward, we remain focused on leading with innovation and leveraging our global scale to drive outstanding returns for our franchisees and shareholders.”
Allison also announced his intention to retire from the company. He will continue to serve as CEO through Apr 30, 2022. Russell Weiner, Domino's chief operating officer and president – Domino's U.S. will be the next CEO.
Earnings & Revenues Discussion
The company reported adjusted earnings per share of $4.25 per share, which missed the Zacks Consensus Estimate of $4.30. However, the reported figure increased 22.8% on a year-over-year basis. The company’s earnings benefited from lower weighted average diluted share count owing to share repurchase and higher net income.
Revenues of $1,343.2 million lagged the consensus mark of $1,394 million and declined 1% on a year-over-year basis. In the prior-year quarter, the company’s revenues had gained primarily due to the inclusion of the 53rd week.
In fourth-quarter fiscal 2021, it opened 468 stores, comprising 89 net new U.S. stores and 379 net new international stores.
Domino's Pizza Inc Price, Consensus and EPS Surprise
Global retail sales (including total sales of franchise and company-owned units) decreased 0.2% on a year-over-year basis in the fiscal fourth quarter. The downside can primarily be attributed to decline in sales at domestic stores (down 2.6%). However, sales at international stores increased 2.2%. Excluding foreign currency impact, global retail sales increased 1% from the prior-year quarter.
For the fiscal fourth quarter, comps at Domino’s domestic stores (including company-owned and franchise stores) increased 1% from the year-ago quarter.
At domestic company-owned stores, Domino’s comps declined 7.3% year over year, against growth of 8.1% in the year-ago period. However, domestic franchise stores comps increased 1.5% year over year compared with an improvement of 11.4% in the prior-year quarter.
Comps at international stores, excluding foreign currency translation, were up 1.8% year over year. This was lower than 7.3% improvement in the year-ago quarter.
Margins
Domino’s operating margin contracted 180 basis points (bps) year over year to 37.7% for the reported quarter. Net income margin for the quarter came in at 11.6%, up 40 bps from the prior-year level.
Balance Sheet
As of Jan 2, 2022, cash and cash equivalents totaled $148.2 million, down from $168.8 million on Jan 3, 2021. It had $155.8 million of available borrowing capacity under its 2021 variable funding notes, net of letters of credit issued of $44.2 million, at the fourth-quarter fiscal 2021-end.
Long-term debt at the fiscal fourth quarter-end was $5.1 billion, compared with $4.1 billion at the end of first-quarter 2021. Inventory amounted to $68.3 million compared with $66.7 million at the end of first-quarter 2021.
Net cash provided by operations totaled $654.2 million at the fiscal fourth quarter-end. For the quarter under review, Domino’s incurred capital expenditures of $94.2 million.
For the fiscal fourth quarter, the company repurchased and retired 443,085 shares of its common stock under the share repurchase program.
Genesco sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 2,739.6%, on average. Shares of the company have gained 33.7% in the past year.
The Zacks Consensus Estimate for Genesco’s 2022 sales and EPS suggests growth of 35.3% and 673.7%, respectively, from the year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 24.7%. Shares of the company have surged 31.3% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 35% and 120.8%, respectively, from the year-ago period’s levels.
Tapestry carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 28.2%, on average. Shares of the company have declined 0.2% in the past year.
The Zacks Consensus Estimate for Tapestry’s 2022 sales and EPS suggests growth of 17.6% and 22.9%, respectively, from the year-ago period’s levels.
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Domino's (DPZ) Q4 Earnings & Revenues Lag Estimates, Stock Down
Domino's Pizza, Inc. (DPZ - Free Report) reported fiscal fourth-quarter 2021 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. The bottom line missed the consensus mark after beating in the preceding three quarters, while the top line lagged the same for the second straight quarter. Following the results, the company’s shares are down 6% in the pre-market trading session.
Ritch Allison, Domino's CEO, said “When we compare our 2021 results back to pre-pandemic 2019, the Domino's brand grew by nearly $3.5 billion in global retail sales over the last two years. Looking forward, we remain focused on leading with innovation and leveraging our global scale to drive outstanding returns for our franchisees and shareholders.”
Allison also announced his intention to retire from the company. He will continue to serve as CEO through Apr 30, 2022. Russell Weiner, Domino's chief operating officer and president – Domino's U.S. will be the next CEO.
Earnings & Revenues Discussion
The company reported adjusted earnings per share of $4.25 per share, which missed the Zacks Consensus Estimate of $4.30. However, the reported figure increased 22.8% on a year-over-year basis. The company’s earnings benefited from lower weighted average diluted share count owing to share repurchase and higher net income.
Revenues of $1,343.2 million lagged the consensus mark of $1,394 million and declined 1% on a year-over-year basis. In the prior-year quarter, the company’s revenues had gained primarily due to the inclusion of the 53rd week.
In fourth-quarter fiscal 2021, it opened 468 stores, comprising 89 net new U.S. stores and 379 net new international stores.
Domino's Pizza Inc Price, Consensus and EPS Surprise
Domino's Pizza Inc price-consensus-eps-surprise-chart | Domino's Pizza Inc Quote
Comps
Global retail sales (including total sales of franchise and company-owned units) decreased 0.2% on a year-over-year basis in the fiscal fourth quarter. The downside can primarily be attributed to decline in sales at domestic stores (down 2.6%). However, sales at international stores increased 2.2%. Excluding foreign currency impact, global retail sales increased 1% from the prior-year quarter.
For the fiscal fourth quarter, comps at Domino’s domestic stores (including company-owned and franchise stores) increased 1% from the year-ago quarter.
At domestic company-owned stores, Domino’s comps declined 7.3% year over year, against growth of 8.1% in the year-ago period. However, domestic franchise stores comps increased 1.5% year over year compared with an improvement of 11.4% in the prior-year quarter.
Comps at international stores, excluding foreign currency translation, were up 1.8% year over year. This was lower than 7.3% improvement in the year-ago quarter.
Margins
Domino’s operating margin contracted 180 basis points (bps) year over year to 37.7% for the reported quarter. Net income margin for the quarter came in at 11.6%, up 40 bps from the prior-year level.
Balance Sheet
As of Jan 2, 2022, cash and cash equivalents totaled $148.2 million, down from $168.8 million on Jan 3, 2021. It had $155.8 million of available borrowing capacity under its 2021 variable funding notes, net of letters of credit issued of $44.2 million, at the fourth-quarter fiscal 2021-end.
Long-term debt at the fiscal fourth quarter-end was $5.1 billion, compared with $4.1 billion at the end of first-quarter 2021. Inventory amounted to $68.3 million compared with $66.7 million at the end of first-quarter 2021.
Net cash provided by operations totaled $654.2 million at the fiscal fourth quarter-end. For the quarter under review, Domino’s incurred capital expenditures of $94.2 million.
For the fiscal fourth quarter, the company repurchased and retired 443,085 shares of its common stock under the share repurchase program.
Domino's currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key picks
Some better-ranked stocks in the Zacks Retail-Wholesale sector include Genesco Inc. (GCO - Free Report) , Arcos Dorados Holdings Inc. (ARCO - Free Report) and Tapestry, Inc. (TPR - Free Report) .
Genesco sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 2,739.6%, on average. Shares of the company have gained 33.7% in the past year.
The Zacks Consensus Estimate for Genesco’s 2022 sales and EPS suggests growth of 35.3% and 673.7%, respectively, from the year-ago period’s levels.
Arcos Dorados carries a Zacks Rank #2 (Buy). ARCO has a long-term earnings growth of 24.7%. Shares of the company have surged 31.3% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 35% and 120.8%, respectively, from the year-ago period’s levels.
Tapestry carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 28.2%, on average. Shares of the company have declined 0.2% in the past year.
The Zacks Consensus Estimate for Tapestry’s 2022 sales and EPS suggests growth of 17.6% and 22.9%, respectively, from the year-ago period’s levels.