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Can Domino’s Pizza Maintain Its Upward Momentum in Q2 2018?

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Jul. 13 2018, Updated 2:19 p.m. ET

Stock performance

Domino’s Pizza (DPZ) is scheduled to announce its second-quarter earnings before the market opens on July 19. As of July 12, it was trading at $279.03, which represents a rise of 19.5% since the announcement of its first-quarter earnings on April 26.

In the first quarter, Domino’s Pizza outperformed analysts’ revenue and EPS estimates. It posted adjusted EPS of $2 against analysts’ estimate of $1.77 and revenues of $785.4 million compared to analysts’ estimate of $691.9 million. It beat analysts’ SSSG (same-store sales growth) expectation of 5.4% in the domestic market by posting 8.3%. Its strong sales and earnings appear to have increased investor confidence, leading to a rise in the stock.

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Year-to-date performance

Domino’s Pizza has been a standout performer among pizza companies in 2018. Despite the increase in competition in the delivery space with the arrival of other restaurants, Domino’s has returned 47.7% since the beginning of 2018. The rally comes after the company returned 18.7% in 2017.

Domino’s Pizza’s peers Papa John’s (PZZA) and Yum! Brands (YUM) have fallen 4.3% and 3.1%, respectively, year-to-date. The broader comparative indexes, the S&P 500 Index (SPY) and the Consumer Discretionary Select Sector SPDR ETF (XLY), have returned 4.4% and 13.5%, respectively.

Series overview

With Domino’s Pizza’s second-quarter earnings just around the corner, we’ll be focusing in this series on analysts’ revenue and EPS expectations. We’ll also cover analysts’ expectations for 2018 and management’s guidance. Finally, we’ll end the series by looking at the company’s valuation multiple and analysts’ recommendations.

Let’s start by looking at analysts’ revenue estimates.

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