Domino’s same-store sales growth
About 93% of Domino’s (DPZ) revenue comes from the US, and the majority of the company’s revenue growth comes from strong performance in same-store sales growth. Domino’s Pizza continues its double-digit same-store sales growth trend in 2015. Growth in the same-store sales during 2Q15 come from stronger orders, similar to the previous quarter.
Domino’s Pizza reported a same-store sales growth of 12.8%, which grew from 5.4% in 2Q14. However, this metric was down from 14.5% in 1Q15. During the quarter, Domino’s opened a net of 22 stores and a total of 96 stores over the past 12 months.
In the chart above, you can see that the retail trade data on the past three-month rolling basis has decreased to 8.5%. In our pre-earnings series Key Updates Before Domino’s 2Q15 Earnings Announcement, we noted, “While the weakness in retail sales has subdued the outlook for Domino’s same-store sales growth in 2Q15, the improving employment scenario compared with a year ago gives the company a reason to expect better year-over-over-year same-store sales growth.”
The US unemployment rate of 5.3% and jobless claims below 300,000 are both favorable for Domino’s Pizza and other restaurant companies.
If you are considering a broader consumer discretionary portfolio, you may look into the Consumer Discretionary Select Sector SPDR ETF (XLY), which holds 1.5% of Yum! Brands (YUM), 4% of McDonald’s (MCD), and 1% of Chipotle Mexican Grill (CMG).
In 2Q15, international same-store sales growth (excluding the impact of foreign currency) stood at 6.7%, down from 7.7% in 2Q14. Domino’s Pizza continues its unit growth momentum. Globally, Domino’s added a net of 172 stores and a net of 708 stores over the past 12 months.
Read on to learn what is driving Domino’s growth.