Why Investors Aren’t Hungry for Domino’s Earnings

October 12, 2017 by Chris Lange

Domino’s Pizza Inc. (NYSE: DPZ) released its most recently quarterly results before the markets opened on Thursday. The pizza chain posted $1.27 in earnings per share (EPS) and $643.6 million in revenue, while consensus estimates from Thomson Reuters had called for only $1.23 in EPS and revenue of $627.35 million. The third quarter of last year reportedly had EPS of $0.96 and $566.68 million.

During the quarter, domestic same-store sales grew 8.4% and international same-store sales grew 5.1%, compared to 13.0% and 6.6%, respectively, in the same period last year.

Net income grew 19.3% for the third quarter versus the prior-year period, primarily driven by an increase in same-store sales growth and store count as well as higher supply chain volumes. The adoption of the new equity-based compensation accounting standard also has a positive impact on net income.

The board of directors declared a 46 cent per share quarterly dividend for shareholders of record as of December 15, to be paid on December 29.

On the books, Domino’s cash and cash equivalents totaled $61.36 million at the end of the quarter, up from $42.82 million at the end of the previous fiscal year.

J. Patrick Doyle, Domino’s president and CEO, commented:

The third quarter was an excellent example of us simply continuing to do what we do best: executing on our long-term strategy, relying upon our strong fundamentals and aligning with our outstanding U.S. and international operators to turn in another quarter of phenomenal results. The momentum behind this business continues to amaze me, proving once again that our domestic and international franchisees are second to none.

Shares of Domino’s were last seen down about 4.8% at $199.20, with a consensus analyst price target of $212.31 and a 52-week range of $149.67 to $221.58.

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