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Pizza Companies: Why Stock Prices Are Struggling

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Nov. 20 2020, Updated 3:47 p.m. ET

Pizza companies

In this series, we’ll look at three pizza companies’ performances and key financial indicators in 2Q17—Domino’s Pizza (DPZ), Papa John’s (PZZA), and Yum! Brands (YUM).

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Stock performance

Yum! Brands outperformed the other two companies by posting a return of 1.2% since the announcement of its 2Q17 earnings. The company beat analysts’ 2Q17 earnings and revenue estimates, which led to a rise in its stock price.

Papa John’s is next—its stock price has returned 0.8% since the announcement of its 2Q17 earnings. The better-than-expected 2Q17 earnings per share)and rise in its share repurchase program helped the company’s stock price increase.

Domino’s Pizza’s stock prices have fallen 14.6% since the announcement of its 2Q17 earnings. Lower-than-expected same-store sales growth in the international market led to a fall in Domino’s stock price.

Pizza companies’ stock prices struggled due to new players entering the delivery service space. McDonald’s (MCD), Chipotle Mexican Grill (CMG), and Buffalo Wild Wings (BWLD) are testing delivery services. The new players will allow customers to have more choices, which is expected to lower pizza companies’ sales.

For a more detailed analysis of Domino’s and Papa John’s 2Q17 earnings, read Why Didn’t Domino’s 2Q17 Earnings Impress Investors? and Papa John’s Delivers in 2Q17.

Year-to-date performance

Since the beginning of 2017, Papa John’s, Domino’s Pizza, and Yum! Brands have returned -16.2%, 15.1%, and 20.7%, respectively.

Notably, the S&P 500 Index (SPX) and the iShares U.S. Consumer Services ETF (IYC) have returned 10.1% and 8.3%, respectively. IYC has invested 11.9% of its investments in restaurants and travel companies.

In the next part of this series, we’ll compare the three pizza companies’ revenue growth in 2Q17.

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