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What's Behind Domino's (DPZ) 22% Increase in Three Months?
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Shares of Domino's Pizza, Inc. (DPZ - Free Report) have exhibited outstanding performance in the past three months. The stock has gained 22.4% against the industry’s decline of 6.5%. DPZ is experiencing positive outcomes due to strong expansion initiatives, impressive comparable sales growth, adoption of digital technologies and continuous menu innovation.
The Zacks Rank #2 (Buy) company has an impressive long-term earnings growth rate of 13%. Further, analysts are very optimistic about its solid prospects. In the past 30 days, earnings estimate for 2023 has witnessed a 2.8% upward revision to $11.49 per share.
Let's explore further to uncover the driving forces behind Domino's growth.
Factors Propelling Growth
The company remains focused on expanding its presence in high-growth international markets to boost business. Meanwhile, its international growth continues to be strong and diversified across markets due to exceptional unit-level economics.
During fiscal second quarter, Domino's added 27 net new stores in the United States, thereby bringing the total U.S. system store count to 6,735 stores. During the quarter, its international business added 170 net new stores. Also, DPZ is confident about its two-to-three year outlook of 5-7% in annual global net store growth.
Image Source: Zacks Investment Research
Domino's is also benefiting from solid comps growth. During the fiscal second quarter, global retail sales (including total franchise and company-owned units) rose 4.3% on a year-over-year basis. The upside was driven by higher international store sales (up 6.9% year over year). Meanwhile, U.S. store sales increased 1.7% year over year.
Excluding foreign-currency impacts, global retail sales increased 5.8% from the prior-year quarter’s levels. At domestic company-owned stores, Domino’s comps increased 5.5% year over year against a decline of 9.2% reported in the year-ago quarter.
Domino’s is investing heavily in technology-driven initiatives like digital ordering to bolster sales. During first-quarter fiscal 2023, the company initiated the roll out of electric vehicles for pizza delivery. Apart from this, enhanced make-line and cut-table technology, and AI-enabled forecasting are being rolled out for better matching of demand with capacity. These initiatives are likely to enhance speed, accuracy and efficiency of services going forward.
Domino's realizes the benefits associated with electric cars, such as long-lasting batteries with the potential for several days of deliveries, no tailpipe emissions, cutting-edge safety measures and lower average maintenance costs (compared with non-electric vehicles). Management recently announced plans to roll out more than 1,100 custom branded 2023 Chevy Bolt electric vehicles at select franchise and corporate stores by the end of the current year.
Other Key Picks
Below we present some other top-ranked stocks in the Zacks Retail-Wholesale sector.
The Zacks Consensus Estimate for BJRI’s 2023 sales and EPS indicates 5.6% and 423.5% growth, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) currently carries a Zacks Rank #2. ARCO has a long-term earnings growth rate of 9.5%. The stock has gained 6.2% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests rises of 19% and 11.6%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. (CHUY - Free Report) holds a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 26.6%, on average. Shares of CHUY have surged 72.1% in the past year.
The Zacks Consensus Estimate for CHUY’s 2023 sales and EPS implies increases of 9.5% and 32.9%, respectively, from the year-ago levels.
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What's Behind Domino's (DPZ) 22% Increase in Three Months?
Shares of Domino's Pizza, Inc. (DPZ - Free Report) have exhibited outstanding performance in the past three months. The stock has gained 22.4% against the industry’s decline of 6.5%. DPZ is experiencing positive outcomes due to strong expansion initiatives, impressive comparable sales growth, adoption of digital technologies and continuous menu innovation.
The Zacks Rank #2 (Buy) company has an impressive long-term earnings growth rate of 13%. Further, analysts are very optimistic about its solid prospects. In the past 30 days, earnings estimate for 2023 has witnessed a 2.8% upward revision to $11.49 per share.
Let's explore further to uncover the driving forces behind Domino's growth.
Factors Propelling Growth
The company remains focused on expanding its presence in high-growth international markets to boost business. Meanwhile, its international growth continues to be strong and diversified across markets due to exceptional unit-level economics.
During fiscal second quarter, Domino's added 27 net new stores in the United States, thereby bringing the total U.S. system store count to 6,735 stores. During the quarter, its international business added 170 net new stores. Also, DPZ is confident about its two-to-three year outlook of 5-7% in annual global net store growth.
Image Source: Zacks Investment Research
Domino's is also benefiting from solid comps growth. During the fiscal second quarter, global retail sales (including total franchise and company-owned units) rose 4.3% on a year-over-year basis. The upside was driven by higher international store sales (up 6.9% year over year). Meanwhile, U.S. store sales increased 1.7% year over year.
Excluding foreign-currency impacts, global retail sales increased 5.8% from the prior-year quarter’s levels. At domestic company-owned stores, Domino’s comps increased 5.5% year over year against a decline of 9.2% reported in the year-ago quarter.
Domino’s is investing heavily in technology-driven initiatives like digital ordering to bolster sales. During first-quarter fiscal 2023, the company initiated the roll out of electric vehicles for pizza delivery. Apart from this, enhanced make-line and cut-table technology, and AI-enabled forecasting are being rolled out for better matching of demand with capacity. These initiatives are likely to enhance speed, accuracy and efficiency of services going forward.
Domino's realizes the benefits associated with electric cars, such as long-lasting batteries with the potential for several days of deliveries, no tailpipe emissions, cutting-edge safety measures and lower average maintenance costs (compared with non-electric vehicles). Management recently announced plans to roll out more than 1,100 custom branded 2023 Chevy Bolt electric vehicles at select franchise and corporate stores by the end of the current year.
Other Key Picks
Below we present some other top-ranked stocks in the Zacks Retail-Wholesale sector.
BJ's Restaurants, Inc. (BJRI - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 121.2%, on average. Shares of BJRI have increased 34.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BJRI’s 2023 sales and EPS indicates 5.6% and 423.5% growth, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) currently carries a Zacks Rank #2. ARCO has a long-term earnings growth rate of 9.5%. The stock has gained 6.2% in the past year.
The Zacks Consensus Estimate for Arcos Dorados’ 2023 sales and EPS suggests rises of 19% and 11.6%, respectively, from the year-ago period’s levels.
Chuy's Holdings, Inc. (CHUY - Free Report) holds a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 26.6%, on average. Shares of CHUY have surged 72.1% in the past year.
The Zacks Consensus Estimate for CHUY’s 2023 sales and EPS implies increases of 9.5% and 32.9%, respectively, from the year-ago levels.