- Domino's Pizza Inc DPZ reported third-quarter FY22 sales growth of 7.1% year-on-year to $1.068 billion, marginally beating the consensus of $1.06 billion.
- EPS of $2.79 missed the consensus of $2.97.
- Stephens analyst Joshua Long reiterated an Equal-Weight on Domino's Pizza and a $368 price target.
- DPZ's Q3 U.S. same-store sales growth beat his and Street's estimates. However, the international comps missed the forecast. The lapping of the VAT holiday affected the international comps.
- Total revenues were in line with the estimates.
- The company-owned operating margin and adjusted EPS missed the consensus.
- On the development side, Domino's opened 24 and 201 net new units in the U.S. and internationally, below the estimates.
- Finally, after the closing of Q3, the company sold 114 U.S. company-owned stores in Arizona and Utah for $41.1 million.
- The revised FY22 guidance reflected FX headwinds, G&A, and capex.
- On the conference call, the analyst will look for commentary regarding indications of top-line momentum, operational and strategic adjustments, and a discussion of plans to stimulate demand.
- Cowen analyst Andrew Charles reiterated a Market Perform and $362 price target.
- While he was pleased with better-than-expected U.S. comps as investors braced for a miss, net restaurant growth & EPS missed while international comps were in between his estimate & consensus.
- On the call, he will monitor greater open-mindedness to adopt 3rd party delivery though this seems unlikely given 90 bps of sequential acceleration in U.S. comps on a 3-year basis.
- He will also look for any commentary around the Q3 exit rate of sales, given investor concern on a Boost Week between 8/15-8/21, shortly followed by an "Inflation Relief Deal" launched on 9/6.
- Domino's noted that the international decline was partially driven by a VAT holiday in the U.K.
- He noted fortressing activity in India, DPZ's most significant international market by store counts, likely also weighed on international comps.
- Price Action: DPZ shares are trading higher by 10.76% at $334.21 on the last check Thursday.
- Photo Via Wikimedia Commons
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