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Domino's (DPZ) Q4 Earnings Beat, Revenues Miss Estimates
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Domino's Pizza, Inc. (DPZ - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. However, both metrics increased year over year. Following the announcement, the stock rose 5% in the pre-market trading session.
Earnings & Revenue Discussion
In the quarter, Domino's reported adjusted earnings per share (EPS) of $4.48, surpassing the Zacks Consensus Estimate of $4.37. The figure rose 1.1% from $4.43 reported in the year-ago quarter.
Revenues of $1,403 million missed the consensus mark of $1,416 million, but increased 0.8% on a year-over-year basis. The upside can be attributed to higher global franchise royalties and fees owing to global retail sales growth (excluding foreign currency impact) as well as higher supply-chain revenues. However, the increase was partially overshadowed by a decrease in U.S. franchise advertising revenues.
In fourth-quarter fiscal 2023, Domino's had 431 gross store openings and 37 gross store closures.
Other Metrics
Global retail sales (excluding foreign currency impact) rose 4.9% on a year-over-year basis in the fiscal fourth quarter. The upside was driven by higher international store sales (up 5.2% year over year). Meanwhile, U.S. store sales increased 4.5% year over year.
For the fiscal fourth quarter, comps at Domino’s domestic stores (including company-owned and franchise stores) rose 2.8% year over year. Our model predicted the metric to increase 1.1% from the year-ago levels.
At domestic company-owned stores, Domino’s comps gained 5.9% year over year compared with 3.4% a year ago. We estimated the metric to increase 2.9%.
Domestic franchise store comps jumped 2.6% year over year compared with 0.8% in the prior-year quarter. Our model suggested the metric to increase 1%.
Comps at international stores, excluding foreign currency translation, improved 0.1% year over year compared with 2.6% in the prior-year quarter.
Domino's Pizza Inc Price, Consensus and EPS Surprise
In the fiscal fourth quarter, Domino’s gross margin expanded 160 basis points (bps) year over year to 38.4%.
Net income margin was 11.2%, down 20 bps from the year-ago quarter. Our estimate was pegged at 10.6%.
Balance Sheet
As of Dec 31, 2023, cash and cash equivalents totaled $114.1 million compared with $60.4 million as of Jan 1, 2023. Long-term debt (less current portion) at the fiscal fourth-quarter end was $4,934.1 million compared with $4,967.4 million at the end of Jan 1, 2023. Inventory amounted to $83 million compared with $81.6 million at the end of Jan 1, 2023.
Capital expenditure in the quarter totaled $105.4 million compared with $87.2 million as of Jan 1, 2023
During fiscal fourth quarter, the company repurchased and retired 167,572 shares for an aggregated cost of $58.2 million. As of Dec 31, 2023, DPZ stated the availability of $141.3 million under its repurchase program.
Management declared a 25% increase in cash dividend to $1.51 per share. The dividend will be paid on Mar 29, 2024, to shareholders of record as of Mar 15, 2024.
Long-Term Guidance (2024-2028)
The company expects more than 7% annual global retail sales growth. It anticipates more than 1,100 annual global net store growth. DPZ expects more than 8% annual income from operation growth.
McDonald's Corporation (MCD - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
During the quarter, MCD reported adjusted EPS of $2.95, outpacing the Zacks Consensus Estimate of $2.81. Adjusted earnings increased 11% year over year. Quarterly net revenues of $6.4 billion missed the consensus mark of $6.5 billion. The top line rose 8% year over year. The upside was backed by menu price increases, effective marketing campaigns, and continued digital and delivery growth.
Yum China Holdings, Inc. (YUMC - Free Report) reported impressive fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
During the quarter, YUMC reported adjusted EPS of 25 cents, beating the Zacks Consensus Estimate of 13 cents. The bottom line surged 92.3% from 13 cents reported a year ago. Quarterly revenues of $2.5 billion outpaced the consensus mark of $2.4 billion. The top line rose 19.4% on a year-over-year basis.
Excluding foreign currency translation, revenues increased 21% year over year. The upside can be attributed to net new unit contribution (12%) and same-store sales growth (4%).
Brinker International, Inc. (EAT - Free Report) reported second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis. Effective marketing and pricing strategies backed the upside. Sequential improvements in guest traffic bode well.
During the quarter, EAT reported adjusted EPS of 99 cents, surpassing the Zacks Consensus Estimate of a loss of $1.47. The company reported adjusted EPS of 76 cents per share in the prior-year quarter. Quarterly revenues of $1.07 billion missed the Zacks Consensus Estimate of $1.08 billion. The top line increased 5.4% on a year-over-year basis. EAT gained from Chili's solid performance.
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Domino's (DPZ) Q4 Earnings Beat, Revenues Miss Estimates
Domino's Pizza, Inc. (DPZ - Free Report) reported mixed fourth-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. However, both metrics increased year over year. Following the announcement, the stock rose 5% in the pre-market trading session.
Earnings & Revenue Discussion
In the quarter, Domino's reported adjusted earnings per share (EPS) of $4.48, surpassing the Zacks Consensus Estimate of $4.37. The figure rose 1.1% from $4.43 reported in the year-ago quarter.
Revenues of $1,403 million missed the consensus mark of $1,416 million, but increased 0.8% on a year-over-year basis. The upside can be attributed to higher global franchise royalties and fees owing to global retail sales growth (excluding foreign currency impact) as well as higher supply-chain revenues. However, the increase was partially overshadowed by a decrease in U.S. franchise advertising revenues.
In fourth-quarter fiscal 2023, Domino's had 431 gross store openings and 37 gross store closures.
Other Metrics
Global retail sales (excluding foreign currency impact) rose 4.9% on a year-over-year basis in the fiscal fourth quarter. The upside was driven by higher international store sales (up 5.2% year over year). Meanwhile, U.S. store sales increased 4.5% year over year.
For the fiscal fourth quarter, comps at Domino’s domestic stores (including company-owned and franchise stores) rose 2.8% year over year. Our model predicted the metric to increase 1.1% from the year-ago levels.
At domestic company-owned stores, Domino’s comps gained 5.9% year over year compared with 3.4% a year ago. We estimated the metric to increase 2.9%.
Domestic franchise store comps jumped 2.6% year over year compared with 0.8% in the prior-year quarter. Our model suggested the metric to increase 1%.
Comps at international stores, excluding foreign currency translation, improved 0.1% year over year compared with 2.6% in the prior-year quarter.
Domino's Pizza Inc Price, Consensus and EPS Surprise
Domino's Pizza Inc price-consensus-eps-surprise-chart | Domino's Pizza Inc Quote
Margins
In the fiscal fourth quarter, Domino’s gross margin expanded 160 basis points (bps) year over year to 38.4%.
Net income margin was 11.2%, down 20 bps from the year-ago quarter. Our estimate was pegged at 10.6%.
Balance Sheet
As of Dec 31, 2023, cash and cash equivalents totaled $114.1 million compared with $60.4 million as of Jan 1, 2023. Long-term debt (less current portion) at the fiscal fourth-quarter end was $4,934.1 million compared with $4,967.4 million at the end of Jan 1, 2023. Inventory amounted to $83 million compared with $81.6 million at the end of Jan 1, 2023.
Capital expenditure in the quarter totaled $105.4 million compared with $87.2 million as of Jan 1, 2023
During fiscal fourth quarter, the company repurchased and retired 167,572 shares for an aggregated cost of $58.2 million. As of Dec 31, 2023, DPZ stated the availability of $141.3 million under its repurchase program.
Management declared a 25% increase in cash dividend to $1.51 per share. The dividend will be paid on Mar 29, 2024, to shareholders of record as of Mar 15, 2024.
Long-Term Guidance (2024-2028)
The company expects more than 7% annual global retail sales growth. It anticipates more than 1,100 annual global net store growth. DPZ expects more than 8% annual income from operation growth.
Zacks Rank
Domino's currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
McDonald's Corporation (MCD - Free Report) reported mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
During the quarter, MCD reported adjusted EPS of $2.95, outpacing the Zacks Consensus Estimate of $2.81. Adjusted earnings increased 11% year over year. Quarterly net revenues of $6.4 billion missed the consensus mark of $6.5 billion. The top line rose 8% year over year. The upside was backed by menu price increases, effective marketing campaigns, and continued digital and delivery growth.
Yum China Holdings, Inc. (YUMC - Free Report) reported impressive fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
During the quarter, YUMC reported adjusted EPS of 25 cents, beating the Zacks Consensus Estimate of 13 cents. The bottom line surged 92.3% from 13 cents reported a year ago. Quarterly revenues of $2.5 billion outpaced the consensus mark of $2.4 billion. The top line rose 19.4% on a year-over-year basis.
Excluding foreign currency translation, revenues increased 21% year over year. The upside can be attributed to net new unit contribution (12%) and same-store sales growth (4%).
Brinker International, Inc. (EAT - Free Report) reported second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis. Effective marketing and pricing strategies backed the upside. Sequential improvements in guest traffic bode well.
During the quarter, EAT reported adjusted EPS of 99 cents, surpassing the Zacks Consensus Estimate of a loss of $1.47. The company reported adjusted EPS of 76 cents per share in the prior-year quarter. Quarterly revenues of $1.07 billion missed the Zacks Consensus Estimate of $1.08 billion. The top line increased 5.4% on a year-over-year basis. EAT gained from Chili's solid performance.