Discuss profits and revenues
For the quarter, Domino’s reported adjusted earnings per share (EPS) of $3.08, beating the Zacks Consensus Estimate of $3.04. The number was up 9.2% from the $2.82 reported in the previous quarter.
Revenues of $1,024.6 million topped the consensus mark of $1,065 million. Furthermore, the top line declined by 3.8% year over year. The downside can be attributed to lower supply chain revenues (due to lower market basket pricing) and lower order volumes. The refranchising of 114 US-owned stores in Arizona and Utah also added to the downside.
Domino’s Pizza Inc Price, Consensus and EPS Surprise
Domino’s Pizza Inc price chart, consensus, eps, surprise | Domino’s Pizza Company Quotes
In the second quarter of fiscal 2023, Domino’s opened 197 stores, including 27 new U.S. stores and 170 new international stores.
Global retail sales (including total franchises and company-owned units) rose 4.3% year over year in the fiscal second quarter. The uptrend was driven by higher international store sales (up 6.9% year-on-year). Meanwhile, US store sales rose 1.7% year over year. Excluding foreign exchange effects, global retail sales increased 5.8% from the previous quarter’s levels.
For the fiscal second quarter, comps in domestic Domino’s stores (including company-owned and franchise stores) increased 0.1% from the same-quarter reading last year.
In domestic company-owned stores, Domino’s comps rose 5.5% year-over-year versus a 9.2% decline in the same quarter last year. Our estimate for the measure was 7.3%.
Domestic franchisees declined 0.1% year over year compared to a decline of 2.5% in the previous quarter.
Comps in international stores, excluding foreign currency translation, rose 3.6% year over year versus a 2.2% decline in the previous quarter.
In the fiscal second quarter, Domino’s gross margin expanded 320 basis points year over year to 39.5%. Our gross margin estimate was 36.7%.
Net income margin was 10.7%, an increase of 110 basis points from the same quarter last year. Our estimate for net income margin was 9.9%.
As of June 18, cash and cash equivalents totaled $77 million compared to $154.2 million as of March 26. The value of letters of credit issued amounted to $42.2 million.
Long-term debt (less the current portion) at the end of the second fiscal quarter was $4,944.7 million compared to $4,955.2 million in the previous quarter. Inventory reached $65.6 million, compared to $69.3 million at the end of the first quarter of fiscal year 2023.
Total capital expenditures in this quarter were $38 million compared to $19 million in the previous quarter.
During the fiscal second quarter, the company repurchased and retired 292,030 shares for a total cost of $90.8 million. As of June 18, 2023, the company reported $289.5 million available under its buyback program.
The company announced a cash dividend of $1.21 per share. The dividend will be distributed on September 29, 2023 to shareholders of record as of September 15, 2023.
Zacks Rank and Key Picks
Domino’s currently carries a Zacks Rank #3 (Hold).
Some of the best-ranked stocks in the Zacks Retail – Restaurants sector include:
Dave and Buster Entertainment PLAY carries a Zacks Rank #1 (Strong Buy). PLAY has a Q4 earnings surprise of 6.8% on average. PLAY shares are up 33.2% in the past year. you can see The complete list of today’s Zacks #1 Rank stocks is here.
The Zacks Consensus Estimate for PLAY’s 2024 sales and EPS project an increase of 17% and 29%, respectively, from the year-ago period levels.
PJ Restaurants BJRI has a Zacks Rank of #1. BJRI has a long-term earnings growth rate of 15%. The stock is up 51.2% in the past year.
The Zacks Consensus Estimate for BJ’s Restaurants’ 2023 sales and EPS are projecting growth of 5.5% and 329.4%, respectively, from year-ago period levels.
Choi Holding Company CHUY carries a Zacks Rank of #2 (Buy). The company delivered a fourth-quarter earnings surprise of 23.4% on average. CHUY shares are up 88% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS project growth of 9.9% and 27.7%, respectively, from the year-ago period levels.
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