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Shares of leading restaurateur, Domino's Pizza, Inc. (DPZ - Free Report) reached a 52-week high of $80.52 on Mar 17, 2014. In fact, the company’s share price has been mostly rising ever since it posted strong fourth quarter results on Feb 25, 2014.

Adjusted earnings of 78 cents per share in the fourth quarter of 2013 beat the Zacks Consensus Estimate of 76 cents by 2.6% and the year-ago quarter’s earnings of 64 cents by 21.9%. The upside was driven by higher revenues, margin expansion and lower share count.

Quarterly revenues increased 5% year over year to $566.5 million and also beat the Zacks Consensus Estimate of $563.0 million by 0.6%. Increased domestic store revenues, strong international sales and higher supply-chain revenues aided Domino's top line during the quarter.

Though domestic comps were sluggish, international comps grew 7%, which was better than the third-quarter and the year-ago levels. Also, margins expanded in the quarter driven by favorable revenue mix and higher franchise royalties.

Despite a poor show this quarter, the company expects its domestic comps to increase in the range of 2.0% to 4.0% compared to its previous expectation of 1.0% to 3.0%. Driven by the strong results and a positive outlook, estimates for the first quarter and full year 2014 have largely moved upwards.

Domino’s Pizza has been posting impressive results for the past few quarters on the back of higher traffic and unit growth. Average surprise for the last four quarters is 1.97%.

The company’s international operations promise significant growth opportunities. We believe the company has compelling growth drivers like digital ordering. Its foray into the Pan Pizza category is expected to sustain the revenue momentum.

Domino’s Pizza carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the restaurant industry include Ignite Restaurant Group, Inc. , The Wendy's Company (WEN - Free Report) and Brinker International, Inc. (EAT - Free Report) . While Ignite Restaurant Group and Wendy's carry a Zacks Rank #1 (Strong Buy), Brinker International holds a Zacks Rank #2 (Buy).


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