Domino's Pizza, Inc. (DPZ - Free Report) reported first-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
Following the announcement, shares of the company moved up 4.7% in the pre-market trading session. The company benefited from robust U.S and international same-store sales.
Earnings & Revenue Discussion
In the quarter, Domino's reported adjusted earnings per share (EPS) of $2.93, beating the Zacks Consensus Estimate of $2.66. The figure increased 17.2% from $2.50 reported in the prior-year quarter.
Revenues of $1,024.4 million lagged the consensus mark of $1,029 million. However, the top line improved 1.3% on a year-over-year basis. The upside was mainly driven by higher supply-chain revenues (owing to a rise in market basket pricing), U.S. franchise royalties and fees, and U.S. franchise advertising revenues.
In first-quarter fiscal 2023, Domino's opened 128 stores, comprising 22 net new U.S. stores and 106 net new international stores.
Comps
Global retail sales (including total franchise and company-owned units) rose 2.2% on a year-over-year basis in the fiscal first quarter. The upside was driven by higher U.S stores (up 5.1% year over year). However, international store sales declined 0.5% year over year. Excluding foreign-currency impacts, global retail sales increased 5.9% from the prior-year quarter.
For the fiscal first quarter, comps at Domino’s domestic stores (including company-owned and franchise stores) increased 3.6% from the year-ago quarter’s reading.
At domestic company-owned stores, Domino’s comps increased 7.3% year over year against a decline of 10.5% reported in the year-ago quarter. Domestic franchise store comps increased 3.4% year over year against a decline of 3.2% reported in the prior-year quarter.
Comps at international stores, excluding foreign currency translation, increased 1.2% year over year compared with growth of 1.2% reported in the prior-year quarter.
Margins
In the fiscal first quarter, Domino’s’ gross margin expanded 110 basis points (bps) year over year to 37.6%. The net income margin was 10.2%, up 120 bps from the year-ago quarter.
Balance Sheet
As of Mar 26, cash and cash equivalents totaled $154.2 million compared with $60.4 million as of Jan 1. At the end of first-quarter fiscal 2023, Domino’s had $277.8 million of available borrowing capacity under its 2021 and 2022 variable funding notes, and net of letters of credit issued was $42.2 million.
Long-term debt (less current portion) at the fiscal first-quarter end was $4,955.2 million compared with $4,967.4 million reported in the previous quarter. Inventory amounted to $69.3 million compared with $81.6 million at the end of fourth-quarter fiscal 2022.
Capital expenditure in the quarter totaled $19 million compared with $12.5 million reported in the previous quarter.
2023 Guidance
For fiscal 2023, the company expects capital expenditure of $90-$100 million. General and administrative expenses are anticipated at $425-$435 million.
Zacks Rank & Key Picks
The company currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Arcos Dorados Holdings Inc. (ARCO - Free Report) , Chuy's Holdings, Inc. (CHUY - Free Report) , and Darden Restaurants, Inc. (DRI - Free Report) .
Arcos Dorados currently sports a Zacks Rank #1 (Strong Buy). ARCO has a long-term earnings growth rate of 7.8%. The stock has gained 6.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arcos Dorados’ 2024 sales and EPS suggests growth of 7.8% and 14.7%, respectively, from the year-ago period’s reported levels.
Chuy’s Holdings carries a Zacks Rank #2 (Buy). CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have increased 36.2% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.8% and 19%, respectively, from the year-ago period’s reported levels.
Darden carries a Zacks Rank #2. DRI has a long-term earnings growth rate of 10.1%. The stock has improved 11.3% in the past year.
The Zacks Consensus Estimate for Darden’s 2024 sales and EPS suggests growth of 5.4% and 9.9%, respectively, from the year-ago period’s reported levels.
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Domino's Pizza, Inc. (DPZ - Free Report) reported first-quarter fiscal 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.
Following the announcement, shares of the company moved up 4.7% in the pre-market trading session. The company benefited from robust U.S and international same-store sales.
Earnings & Revenue Discussion
In the quarter, Domino's reported adjusted earnings per share (EPS) of $2.93, beating the Zacks Consensus Estimate of $2.66. The figure increased 17.2% from $2.50 reported in the prior-year quarter.
Revenues of $1,024.4 million lagged the consensus mark of $1,029 million. However, the top line improved 1.3% on a year-over-year basis. The upside was mainly driven by higher supply-chain revenues (owing to a rise in market basket pricing), U.S. franchise royalties and fees, and U.S. franchise advertising revenues.
In first-quarter fiscal 2023, Domino's opened 128 stores, comprising 22 net new U.S. stores and 106 net new international stores.
Comps
Global retail sales (including total franchise and company-owned units) rose 2.2% on a year-over-year basis in the fiscal first quarter. The upside was driven by higher U.S stores (up 5.1% year over year). However, international store sales declined 0.5% year over year. Excluding foreign-currency impacts, global retail sales increased 5.9% from the prior-year quarter.
For the fiscal first quarter, comps at Domino’s domestic stores (including company-owned and franchise stores) increased 3.6% from the year-ago quarter’s reading.
At domestic company-owned stores, Domino’s comps increased 7.3% year over year against a decline of 10.5% reported in the year-ago quarter. Domestic franchise store comps increased 3.4% year over year against a decline of 3.2% reported in the prior-year quarter.
Comps at international stores, excluding foreign currency translation, increased 1.2% year over year compared with growth of 1.2% reported in the prior-year quarter.
Margins
In the fiscal first quarter, Domino’s’ gross margin expanded 110 basis points (bps) year over year to 37.6%. The net income margin was 10.2%, up 120 bps from the year-ago quarter.
Balance Sheet
As of Mar 26, cash and cash equivalents totaled $154.2 million compared with $60.4 million as of Jan 1. At the end of first-quarter fiscal 2023, Domino’s had $277.8 million of available borrowing capacity under its 2021 and 2022 variable funding notes, and net of letters of credit issued was $42.2 million.
Long-term debt (less current portion) at the fiscal first-quarter end was $4,955.2 million compared with $4,967.4 million reported in the previous quarter. Inventory amounted to $69.3 million compared with $81.6 million at the end of fourth-quarter fiscal 2022.
Capital expenditure in the quarter totaled $19 million compared with $12.5 million reported in the previous quarter.
2023 Guidance
For fiscal 2023, the company expects capital expenditure of $90-$100 million. General and administrative expenses are anticipated at $425-$435 million.
Zacks Rank & Key Picks
The company currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Arcos Dorados Holdings Inc. (ARCO - Free Report) , Chuy's Holdings, Inc. (CHUY - Free Report) , and Darden Restaurants, Inc. (DRI - Free Report) .
Arcos Dorados currently sports a Zacks Rank #1 (Strong Buy). ARCO has a long-term earnings growth rate of 7.8%. The stock has gained 6.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arcos Dorados’ 2024 sales and EPS suggests growth of 7.8% and 14.7%, respectively, from the year-ago period’s reported levels.
Chuy’s Holdings carries a Zacks Rank #2 (Buy). CHUY has a trailing four-quarter earnings surprise of 19.1%, on average. Shares of CHUY have increased 36.2% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 10.8% and 19%, respectively, from the year-ago period’s reported levels.
Darden carries a Zacks Rank #2. DRI has a long-term earnings growth rate of 10.1%. The stock has improved 11.3% in the past year.
The Zacks Consensus Estimate for Darden’s 2024 sales and EPS suggests growth of 5.4% and 9.9%, respectively, from the year-ago period’s reported levels.
Top 5 ChatGPT Stocks Revealed
Zacks Senior Stock Strategist, Kevin Cook names 5 hand-picked stocks with sky-high growth potential in a brilliant sector of Artificial Intelligence. By 2030, the AI industry is predicted to have an internet and iPhone-scale economic impact of $15.7 Trillion.
Today you can invest in the wave of the future, an automation that answers follow-up questions … admits mistakes … challenges incorrect premises … rejects inappropriate requests. As one of the selected companies puts it, “Automation frees people from the mundane so they can accomplish the miraculous.”
Download Free ChatGPT Stock Report Right Now >>
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