Domino’s Pizza beats Wall Street estimates
Domino’s Pizza (DPZ) reported its 2Q15 earnings before the market opened on July 16. Its diluted earnings per share came in at $0.81, which grew 20.9% year-over-year, and beat analysts’ consensus estimates of $0.79 per share. At 11:30 AM Eastern time, the stock was trading down 2.5% at $115.50 per share.
Domino’s has returned almost 23% to its investors in 2015, while the benchmark S&P 500 returned only 2.3%. Likewise, the more relevant Consumer Discretionary Select Sector SPDR ETF (XLY) has returned only 10% year-to-date. XLY holds about 1.5% of Pizza Hut’s parent Yum! Brands (YUM).
Favorable industry scenario
The strong 2Q15 results demonstrate a continued strength in the pizza industry. We may see similar trends in Papa John’s (PZZA), which will report its earnings on August 4, 2015, and Papa Murphy’s (FRSH), which will report its earnings on August 12. In this series, we will look at the important points reported during Domino’s earnings call and what they mean for investors.
Domino’s Pizza (DPZ) has 11,600 restaurant units in 75 countries. According to company filings, Domino’s serves about 1.5 million pizzas each day. The company opened its first franchised restaurant in 1965 and went international in 1983.
Domino’s menu mainly offers pizza with a choice of crusts, pasta, oven-baked sandwiches, chicken wings, sides of bread items, beverages, and desserts. The company also offers local toppings in its different markets, such as spicy cheese in the Indian market and squid in the Japanese market.
According to market research firm NPD Group, Domino’s had a 25% share of the US pizza delivery market as of the end of 2014. Read on to learn why Domino’s earnings grew.