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Domino’s Revenues Expected To Come In 8.7% Higher Year-Over-Year

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Domino’s revenues

Domino’s Pizza (DPZ) earns revenues from its company-operated stores, franchise restaurants, and dough manufacturing supply chain. Companies such as Panera Bread (PNRA), McDonald’s (MCD), Yum! Brands (YUM), and others included in the Consumer Discretionary Select Sector SPDR Fund (XLY), earn revenues from company-operated as well as franchise stores. XLY holds ~37% worth of retail in its portfolio, which includes restaurants.

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Analysts expect higher year-over-year revenues

Wall Street analysts estimate that Domino’s will report $616 million in revenues, or 37% sequential growth over 3Q14 revenues of $446 million. In terms of year-over-year revenues, this would mean an 8.7% increase over $566 million in the corresponding quarter a year ago. Higher sales estimates reflect this pizza player’s ongoing strength.

Domino’s Pizza falls under the pizza categories of restaurants we covered in the series, An in-depth overview of the US restaurant industry. Pizza places primarily offer pizza but may also include sides and desserts. They focus heavily on take-out or home-delivery orders and may have limited seating space. Technology has increasingly played an important role in this format. For example, people using websites and apps to place orders pay as well as track their orders online.

Other fast-food companies

Wall Street analysts estimate Papa John’s (PZZA) will report revenues of $411 million when it releases its earnings. Yum! Brands (YUM), which owns Pizza Hut, reported $3,997 million in sales, a 4.4% decline year-over-year. McDonald’s (MCD) reported revenues of $6,572 million, a 7% year-over-year decline. MCD and YUM are each a part of the Consumer Discretionary Select Sector SPDR Fund (XLY). XLY holds ~4% of MCD.

In the next part of this series, we’ll look at same-store sales expectations for Domino’s.

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