Part of the reason why Domino’s stock has done well is the company’s solid top-line performance. This metric has grown at an average of 7.4% year-over-year, since 3Q12.
Share volume was ~2.2 million shares compared to the 90-day average daily volume of ~0.4 million shares. Domino’s stock closed 11% higher at $84.51, according to NASDAQ.
Dividends, which are paid in cash, come from a company’s ability to generate excess income. Excess income is a function of higher sales and stable costs.
When a company repurchases shares, the number of outstanding shares in the market are fewer, which boosts the value per share. This is an alternate way of giving cash back to the shareholders.
Domino’s stockholders’ deficit is a result of the company’s recapitalization efforts in 2007 and 2012. This deficit is funded with debt, which can burden a company with interest payments, resulting in a margin squeeze or a loss.
Management anticipates the effective tax rate to be in the range of 37% to 38% for the “foreseeable future.” Corporate tax rates in the U.S. are high, and force some companies to move their headquarters to countries offering lower tax rates.
The company launched its iPad application in the third quarter. In its earnings call, management said that its iPad app had the highest ticket and conversion of all its digital ordering platforms
Domino’s Pizza, Inc.’s G&A expenses include executive compensation, advertising and promotional expenses, technology expenses, and staffing expenses. The company reported $56.6 million, $2.7 million more than the $55.9 million in the corresponding quarter of 2013.
The company did not pass these costs on to customers by hiking menu prices in the third quarter. Management did note, however, that some of its franchises “raised prices.”
Revenues for domestic and international stores were primarily driven by same-store sales growth and unit growth. Domestic distribution includes revenues from sale of dough, meat products, cheese, and supplies.
Much of the international store growth occurred in India, Japan, the United Kingdom, and Turkey. The company also opened units in new markets including Norway.
There are many possible catalysts for growth in same-store sales, including new menu offerings, product innovation, advertising and promotional campaigns, pricing, mix of offerings, etcetera.
Same-store sales at domestic company-owned restaurants increased 6.1%, compared to 4.6% in the same quarter a year ago. Domestic franchise same-store sales also grew 7.8%, compared to 5.5% over the same period.
Domino’s Pizza, Inc. operates pizza delivery fast food format restaurants in the U.S. and in 70 markets across the world. Domino’s operates over 10,800 restaurants under a combination of company-owned and franchised business models.
As of October 17, 2014, Yum! Brands’ (YUM) year-to-date (or YTD) returns were 3.3%—compared to average returns of 8.34% on the S&P 500 Index.
On October 8, shares began trading at $70.86. The day’s high and low were $70.89 and $69.72, respectively. According to NASDAQ, YUM! Brands closed 2% down at $69.73.
For the company, the overall net income before extraordinary items grew 3% year-over-year (or YoY). However, the net profit margin declined slightly by 42 basis points to 14.23%.
Management lowered its full year earnings per share (or EPS) growth to 6% from 10% before special items. Management lowered the EPS due to the impact of weaker sales in China.
For the Pizza Hut division, management is focused on driving digital initiatives. According the company, digital initiatives were over 40%. This was an increase of over 5% from 2Q14.
In 3Q14, Yum! Brands (YUM) opened 55 KFC units, 55 Pizza Hut units, and 35 Taco Bell units in the U.S. and International division.