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Domino’s Stock Fell on This in 2Q17

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Jul. 28 2017, Updated 7:41 a.m. ET

2Q17 performance

Michigan-based fast-food restaurant chain Domino’s Pizza (DPZ) posted its 2Q17 earnings on July 25, 2017. The company reported adjusted EPS (earnings per share) of $1.32 on revenues of $628.6 million. Compared with 2Q16, the company’s EPS grew by 34.6%, while revenues rose 14.8%.

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Stock performance

Analysts were expecting DPZ to post EPS of $1.23 on revenues of $614.4 million. Although Domino’s outperformed analysts’ EPS and revenue estimates, the stock price of the company declined due to lower-than-expected SSSG (same-store sales growth) in international markets and a decline in its EBIT (earnings before interest and tax) margin.

The company posted SSSG of 2.6% in international markets, compared with analysts’ estimate of 5.0%, while its EBIT margin fell 0.9%  to 18.0%.

As of July 26, 2017, Domino’s was trading at $186.43, which represents a fall of 12.9% since the announcement of its 2Q17 earnings.

Year-to-date performance

Despite the recent fall in DPZ’s stock price, the company has returned 17.1% since the beginning of 2017. During the same period, the stock price of Yum! Brands (YUM) has risen 17.8%, while Papa John’s (PZZA) has fallen 13.8%.

The iShares Select Dividend ETF (DVY) and the S&P 500 Index (SPX) have returned 4.7% and 10.7%, respectively.

Series overview

In this series, we’ll look at Domino’s Pizza’s (DPZ) 2Q17 earnings call and performance on key metrics. We’ll also cover the analyst estimates for the next four quarters.

We’ll continue in the next part by looking at Domino’s 2Q17 revenue growth.

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