Domino's Pizza, Inc. DPZ recently announced an update regarding the results for the third quarter, ended Sep 6, 2015. The company announced comparable sales (comps) as well as unit growth for the third quarter.
During the quarter, the company’s domestic store (including company-owned and franchise stores) comps were up 10.5%, comparing unfavorably 12.8% growth in the prior quarter. The company experienced year-over-year comps growth of 11.5%, down from 12.5% rise in the last quarter in the company-owned stores. Domestic franchise comps grew 10.4%, lower than 12.8% growth in the second quarter. Despite the sequential drop in domestic comps growth, Domino's Pizza reported the 18th consecutive quarter of positive same-store sales domestically.
Comps in the international stores grew 7.7% (foreign currency translation excluded). Further, the international comps were higher than the prior-year quarter improvement of 6.7% — marking the 87th quarter of positive comps growth in the segment.
The company also opened 225 stores in the quarter, of which 201 were in the international markets. The company closed 31 outlets, bringing the total to 12,119. The company also announced that it would record an estimated pre-tax expense of approximately $5.7 million in the third quarter related to workers' claims. This will, in turn, result in a 6-cent decline in earnings per share in the third quarter.
Domino’s Pizza has been posting impressive results for the past few quarters supported by higher traffic and unit growth. We believe that the company’s compelling growth drivers like digital ordering and menu innovation will sustain the revenue momentum, going ahead. Store level economics of Domino’s Pizza is relatively strong. This Zacks Rank #2 (Buy) stock’s robust international operations also promise immense growth prospect. The company expects to report the full third-quarter results on Oct 8.
Stocks to Consider
Other well-ranked stocks in the same sector are Bob Evans Farms, Inc. BOBE, Carrols Restaurant Group, Inc. TAST and Dave & Buster's Entertainment, Inc. PLAY. All these stocks sport a Zacks Rank #1 (Strong Buy).
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