Why Is Domino's Pizza Trading Higher Today?

Monday, Domino’s Pizza Inc DPZ shares are trading higher after the company’s fourth quarter 2023 earnings surpassed Wall Street expectations, raised its quarterly dividend, and announced an additional share buyback plan.

The pizza chain reported fourth-quarter EPS of $4.48, beating the consensus of $4.38.

The company reported sales of $1.40 billion, a slight improvement from $1.39 billion, marginally below the consensus estimate of $1.42 billion.

Revenues growth was primarily due to higher global franchise royalties and fees, resulting from global retail sales growth (excluding foreign currency impact) and higher supply chain revenues, partially offset by a decrease in U.S. franchise advertising revenues. 

U.S. company-owned store gross margin decreased by 1.6 percentage points in the fourth quarter of 2023 as compared to a year ago, primarily due to higher labor costs as a result of higher wage rates, higher insurance costs, and the increase in the loyalty liability resulting from the relaunch of the Domino’s Rewards program.

Domino’s Pizza reported fourth-quarter US same-store sales growth of 2.8%, with international same-store sales growth of 0.1%.

The pizza chain raised its quarterly dividend by 25% to $1.51 and authorized additional stock buyback of up to $1 billion.

The company’s global retail sales growth (excluding foreign currency impact) was 4.9% for the fourth quarter and 5.4% for fiscal 2023.

The company’s global net store growth of 394 for the fourth quarter was 711 for fiscal 2023 (excluding the closure of the Russian market, global net stores grew by 870 for fiscal 2023).

The company affirmed the long-term guidance issued on its December 7, 2023 Investor Day:

• 7%+ Annual global retail sales growth.
•  1,100+ Annual global net store growth.
•  8%+ Annual income from operations growth.

Price Action: DPZ shares are up 6.54% at $462 during the premarket session on the last check Monday.

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