![]() This does not include entering new markets, like Lithuania in Q3, nor does it include smaller international markets. As shown above, the company highlighted the potential for ~13,800 stores in its top-15 international markets, pointing to more than 4,500 more stores that could be added in these markets alone. Looking at international markets, the opportunity continues to be significant relative to what Domino's believes its potential could be long-term. So, while the 1.9% decline in comp sales is certainly an ugly headline number, the 15.6% comp sales growth figure remains impressive on a two-year stacked basis. Given the added staffing headwinds that impacted store hours and service challenges, it would have been nearly impossible to post positive growth. This is because Domino's posted its best quarter of comp sales in over 15 years in Q3 2020 (17.5%). This partially offset weaker than planned store growth than planned in the United States, impacted by construction, equipment, and inspection delays.įrom a comp sales standpoint, it's important to note that while Domino's 41-quarter streak of positive comp sales ended in the United States, this was mostly unavoidable, given that the company was coming up against near-insurmountable comps. Domino's finished the quarter with over 18,000 stores, opened 278 stores internationally in Q3, and 892 stores internationally on a trailing-four-quarter basis. ![]() These results were helped by strong unit growth. Q3 2018 levels and beating last year's record Q3 revenue of $968 million. (Source: Company Filings, Author's Chart)Īs shown above, Domino's has continued to see steady revenue growth relative to pre-COVID-19 levels, with revenue up 27% vs. However, while sales performance was strong, staffing continues to be a headwind, which resulted in Q3 breaking a 41-quarter streak of positive comp sales growth in the U.S. This was driven by a significant increase in the company's store count internationally and strong same-store sales growth in international markets, driven by order growth and the resumption of normal store hours following COVID-19 related impacts. So, while I see Domino's as a top-5 name in the restaurant space, I don't see any way to justify paying above $530.00 for the stock.ĭomino's released its Q3 results in mid-October and reported revenue growth and global retail sales growth of 3% and 10%, respectively. ![]() However, while international remains a huge growth opportunity, the stock looks nearly fully priced short-term, trading at 34x FY2022 earnings estimates. This has pushed the stock's year-to-date return above 37%, outperforming the restaurant industry group by nearly 2000 basis points. However, Domino's Pizza ( NYSE: DPZ) has continued to outperform its peers, helped by a solid Q3 report with impressive growth internationally. It's been a tough H2 for the restaurant industry, with staffing shortages persisting and inflationary pressures worse than expected. The analyst reaffirmed his $201 price target for Domino's Pizza shares, representing 17 percent upside to Tuesday's close.Justin Edmonds/Getty Images Entertainment It is up 8 percent year to date through Tuesday compared with the S&P 500's 17 percent gain. The company's stock has underperformed the market this year. These chains simply lack the scale and resources to effectively compete with Domino's as digital ordering has become increasingly important to customers ordering pizza for delivery (or takeout)," he wrote. "As Domino's continues to grow, we believe that this is placing more competitive pressure on local and regional international pizza chains. may be further opportunities for international franchisees to buy rival pizza chains and convert them to the Domino's brand name, which helps Domino's unit growth without corporate commitment of capital," analyst Mark Kalinowski wrote in a note to clients Wednesday. ![]() Domino's stock is 22 percent off its 52-week high, reached in late June.ĭomino's shares are "relatively more attractive than they had been. The former high-flying stock started declining after it reported weaker-than-expected second-quarter international same-store sales results in late July. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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