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Domino’s Pizza’s Q3 2018 Earnings: Will It Boost the Stock?

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Stock performance

Domino’s Pizza (DPZ) is scheduled to announce its third-quarter earnings before the market opens on October 16. As of October 10, it was trading at $274.92, which represents a fall of 3.1% since the announcement of its second-quarter earnings on July 19.

In the second quarter, which ended on June 17, Domino’s outperformed analysts’ EPS expectation of $1.75 by posting $1.84. However, its revenues and SSSG (same-store sales growth) fell short of analysts’ expectations. The company’s SSSG at domestic company-owned restaurants came in at 5.1% compared to analysts’ expectation of 6.6%. Its restaurants in the international market posted SSSG of 4% compared to analysts’ expectation of 5.3%. The lower-than-expected sales led to a fall in the stock.

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Year-to-date stock performance

Despite the recent decline in DPZ stock, Domino’s has returned 45.5%, YTD (year-to-date). Its peers Papa John’s (PZZA) and Yum! Brands (YUM) have returned -3.7% and 9.3%, respectively, YTD.

The broader comparative index, the Consumer Discretionary Select Sector SPDR ETF (XLY), which has invested 7.9% of its holdings in restaurant and travel companies, has returned 9.9% YTD.

Series overview

With Domino’s third-quarter earnings just around the corner, we’ll look at analysts’ revenue and EPS expectations in this series. We’ll also cover analysts’ expectations for 2018. We’ll end the series by looking at the company’s valuation multiple and analysts’ recommendations.

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

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