As of October 17, 2014, year-to-date returns for Domino’s Pizza, Inc. (DPZ) were 11.6%. In comparison, average returns on the S&P 500 Index were 8.34%, and about 1.1% for Domino’s peers, as you can see in the chart below.
Domino’s had the highest year-to-date returns, resulting from a strong third-quarter performance. In the above table, you can see that Domino’s last-12-month ROE (return on equity) is zero. ROE represents the percentage of income generated from shareholders’ equity, and it’s calculated as net income divided by shareholders’ equity.
Domino’s shareholders’ equity was negative, so in other words, was a shareholders’ deficit, as of third-quarter end. This was primarily due to the company’s higher asset liabilities. But these liabilities should also amplify the company’s ROA (return on assets). As of third-quarter end, ROA was 35.5% compared to the chart average of 16.7%, or 13.5%, excluding Domino’s.
Liabilities were higher due to a significant amount of debt on the balance sheet, as we saw in Part 10 of this series.
Market Realist analyzes how companies perform compared to both previous results and those of similar companies. We publish earnings overviews every quarter.
Recent Market Realist articles offer additional insight into the restaurant industry. See these articles for more on key players in the industry:
- Wendy’s (WEN) – Why Wendy’s top line declined
- Tim Hortons (THI) – Why Tim Hortons introduced a mobile app and loyalty cards
- Starbucks (SBUX) – Why Starbucks is expanding relevant offerings
Starbucks is also included in the Consumer Discretionary Select Sector SPDR Fund (XLY).